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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
 Posted - 08/09/2008 : 16:13:09
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Gold, Oil Ratio `Out of Whack' After Declines: Chart of the Day
By Claudia Carpenter
Excerpts-
Gold jewelry demand in India and Turkey was ``extremely strong'' in the past week, with sales to India the highest since this time last year as buyers took advantage of lower prices and rebuilt inventories, according to UBS AG.
.......The CHART OF THE DAY highlights the ``black gold ratio,'' showing how much gold it would take to buy a barrel of oil. The ratio rose to 0.1538 of an ounce on June 12, the highest since at least 1950, and averaged 0.066 since 1970. Based on historical averages, if oil falls to $100, gold would go to $1,515 an ounce.
......."This ratio is way out of whack," Chidley said from Stamford, Connecticut. ``As we've seen the oil price come off, that relationship could come back into focus and I see the relationship below 0.1 in the next six months with gold coming up. Indian jewelers have to come back to the market.''
The October-December period is the busiest season in India for jewelry sales, spurred by the wedding season and Diwali, the Festival of Light.
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If demand during the October through December period remains strong or increases from prior years, this may help push up the price of gold and drag silver up along with it. Late Fall and early Winter of 2008 may be the bounce in PM prices, at least we can hope.
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Gold, Oil Ratio `Out of Whack'
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