RE:RE:RE:Oil is cheap compared to gold Jay...interesting you bring this up.
The long run average ratio of an ounce of gold to a barrel of oil is 16. Historically the range has been between 10 and 30. Right now it is at 27. If we have reversion to the mean, which one will change gold or oil? Thinking most people here are wishing that it ius a higher price for oil that will bring the ratio down.
If oil were to be the way it is done then we would see a huge rise in the oil price and with it a significant uptick in inflation which could even trigger rate hikes which in turn would have a big negative effect on equity prices.
If is gold that drives the ratio then it would be prudent to divest of gold or for risk takers even short it.
Will be interesting to see how this plays out.