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Gold-Oil Ratio: Value Ratio of Gold to Oil

Gold-oil ratio

The gold-oil ratio, the price relationship between gold and oil, averaged 17 from 1970 to 2010, meaning that one ounce of gold was worth 17 barrels of oil.

Gold-oil ratio

Ratio of gold price to oil price: gold-oil ratio

Source:  Own calculations and presentation based on data from (Internet retrieval, dated 01/06/2012).

High: 41.71 (06/1973)

Low: 6.2 (08/2005)

In the past four decades, the gold-oil ratio fell below 10 only once. It almost seems as if it were a kind of "support zone" familiar from chart analysis.[1] It was only breached slightly on the downside from 2005 to 2008 due to sharply rising oil prices and temporarily advanced to become a "resistance line". In the course of the financial market crisis of 2008/2009, the ratio then rose again to the arithmetic mean. The arithmetic mean and the upper boundary of the "trend channel" also appear to be support zones and resistance lines, respectively. The trend channel has been briefly abandoned to the upside only twice in the past four decades, namely (1) at the beginning of the 1970s as a result of the sharp increases in gold prices following the abolition of the gold standard and (2) in the second half of the 1980s, when oil prices fell sharply due, among other things, to substantial overcapacities and the price downturn triggered or intensified as a result. Here, too, the close link between gold and oil prices already discussed in chapter 8 becomes clear.


As global demand for oil will continue to rise, not least due to the dynamic development of the emerging markets, but oil reserves are limited, the oil price is also likely to rise significantly in the coming years. If it were to double again in relation to the peak in 2008, when it rose by 150% in one and a half years to US$146 per barrel, a gold price of US$5,000 per fine ounce of gold could be derived from the average price ratio between gold and oil over the past four decades.