A week ago we noticed something extreme in the price relationship between gold and oil. [2]At the time we asked "is gold rich or oil cheap?" It appears we have our answer... perfectly tagging the January highs in the gold/oil ratio, the screaming rally in oil has pushed the ratio back into a less extreme region...
From a week ago. [2]..Is Oil Cheap? Is Gold Expensive?
[3]
And now...
[4]
The same level we saw in early 2009 before oil surged...
[5]
And in the last few days post FOMC Minutes, the oil-USD correlation regime has shifted dramatically...
[6]
So does Oil have further to run? or is gold set for a renewed drop?
Charts: Bloomberg
