A recent issue of Agora's 5 Minute Forecast contained two useful and interesting concepts. The first looked at the relationships between oil and gold:
"Oil and gold, two commodities that generally trade in the same direction, appear to be setting up for a historic separation. Currently, it takes 17.5 barrels of crude oil to buy one ounce of gold. The historical average for this ratio is about 15 barrels to the ounce. So… “Either oil is oversold or gold is overbought,” writes Dan Denning.
“For the ratio to return toward its historic average, oil prices would have to rise or gold prices fall. But for the short term, we reckon the ratio will increase, with the oil price falling more and the gold price holding steady or rising. There’s no law of physics that says the ratio must return to 15, but 15 is the average over time.
“Which means 2009 is going to be a strange one. Oil prices should fall to reflect a slowing world economy. Gold prices should rise to reflect the inflationary fires being stoked all over the globe.”"
Second, it discusses a recent World Gold Council report, and the record-breaking figures it cites, including:
* Dollar demand for gold in Q3 was a record $32 billion, 45% higher than the previous record (2Q 2008)
* Europe set an all-time record 1.64 million ounces of gold buying, and with France becoming a net investor for the first time since the 1980s
* Gold ETFs has record quarterly inflow of 4.8 million ounces in Q3.