Gold is surging while Crude Oil is lagging
Here is a ratio chart of Gold 
XAUUSD and Crude Oil USOIL.
Historically you can see it goes to extremes. Especially in 2020 when crude oil went to zero (and negative). I cut that spike out of the chart so hopefully it shows here.
When the Global Financial Crisis in 2008-2009 hit, crude oil hit $140 and gold was low which set up the bottom of this chart on the lower-left. Crude was expensive and gold was cheap.
The opposite happened during Covid when crude plunged and gold stayed relatively calm.
These are generational trades that can make traders rich but they take too long for the average small investor to stay focused and take advantage of these setups.
With Gold now at the upper end of the range of this ratio, it is time to start looking elsewhere to protect your wealth.
Can this ratio continue higher? Yes, of course.
I point it out as a starting point for your trading. If you are just getting long gold up here now, you need to understand where the historical range is for this ratio and decide if you want energy to keep you warm and let you travel or do you want a store of money. It is always a trade-off between the two. You can't live with only one of these commodities.
Cheers.
Tim
12:33PM EST, October 22, 2024
XAUUSD and Crude Oil USOIL.Historically you can see it goes to extremes. Especially in 2020 when crude oil went to zero (and negative). I cut that spike out of the chart so hopefully it shows here.
When the Global Financial Crisis in 2008-2009 hit, crude oil hit $140 and gold was low which set up the bottom of this chart on the lower-left. Crude was expensive and gold was cheap.
The opposite happened during Covid when crude plunged and gold stayed relatively calm.
These are generational trades that can make traders rich but they take too long for the average small investor to stay focused and take advantage of these setups.
With Gold now at the upper end of the range of this ratio, it is time to start looking elsewhere to protect your wealth.
Can this ratio continue higher? Yes, of course.
I point it out as a starting point for your trading. If you are just getting long gold up here now, you need to understand where the historical range is for this ratio and decide if you want energy to keep you warm and let you travel or do you want a store of money. It is always a trade-off between the two. You can't live with only one of these commodities.
Cheers.
Tim
12:33PM EST, October 22, 2024
Note
Gold has come off since October 22 and Crude Oil has chopped sideways.
The election is behind us and the market's hedging of inflation seems to have run its course.
If we get growth and more oil supply, gold will fall and oil will fall.
Tim
7:14PM Friday, November 8, 2024
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