Compared To Gold, Oil Is Still The Better Value

The gold to oil ratio is 19.11, over 27 percent elevated from 15.

Oil Is Still "On Sale"

Oil is still "on sale", but the discount relative to gold has declined a little bit.

The gold to oil ratio stands at 16.8, which represents a mark-down of roughly only 12 percent for oil. Gold has firmed up in the neighborhood of 1615 of late, presumably on central bank acquisitions replacing coin demand. And saber rattling and unrest in the Middle East continue to put pressure on oil prices, moving the ratio closer to the theoretical norm of 15.

We've had gold to oil ratios much higher than 15 in recent months, including hits of 19.5 and the like.  But I don't like oil and gold at any of these prices. I'm not acquiring these and I'm holding what I've got because I bought them low.

Assets remain inflated overall.

Relative to Gold, Oil is Still ON SALE

The gold to oil ratio stands at 17.44, meaning oil is "on sale" relative to the price of gold.

Gold To Oil Ratio Vaults To 19.5

Gold surged on US economic weakness and euro fears to $1,622 the ounce today, while oil has tumbled to $83 the barrel, elevating the gold to oil ratio 30 percent off the 15 level.

Today's Gold to Oil Ratio is a Little High at 16.47

1584 the ounce/96.13 the barrel, almost 10 percent.

A pull-back in gold from here to the 1450 area or a rise in oil to about 105 would move the ratio toward the average of 15.

Since oil is a commodity constantly needed and therefore in constant demand, gold is money, and over-indebtedness is ubiquitous, I'm guessing we'll see continued liquidation of gold to help pay the bills. 

Today's Gold to Oil Price Ratio is About 15.86

In other words, 15.86 barrels of oil buys one ounce of gold.

Oil could rise to about $111 per barrel from today's $104.93 to achieve the perfect balance of 15:1.

Or gold could descend to about $1,575 the ounce to achieve the same thing.

The dollar has been trading in a fairly steady range of 3 percent for much of 2012 to date.