Why is gold now buying so much oil?

Gold's buying power has surged due to a commodity price boom, particularly affecting gold and metals, which has dramatically revised market ratios.

When was the last time gold had this much buying power over oil?

The last time gold could buy this much oil was briefly in the spring of 2020, coinciding with oil prices turning negative during the pandemic.

What does the gold-to-oil ratio tell us about the economy?

A significant shift in the gold-to-oil ratio, like the current one, indicates major volatility and revaluation within global commodity markets.

Home / Business and Economy / Gold vs. Oil: Record 80 Barrels per Ounce Buying Power

Gold vs. Oil: Record 80 Barrels per Ounce Buying Power

7 Jan

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Summary

Gold now purchases nearly 80 barrels of oil, an unprecedented ratio.
This gold-to-oil buying power has not been seen in 35 years.
The last occurrence coincided with oil prices briefly turning negative.

Gold vs. Oil: Record 80 Barrels per Ounce Buying Power

Commodity prices, particularly for gold and metals, have surged, leading to significant market shifts and challenging established economic ratios. Currently, one ounce of gold is capable of purchasing nearly 80 barrels of oil, a ratio that highlights the dramatic revaluation occurring in these markets.

This exceptional gold-to-oil exchange rate is a historical anomaly, as it has not been seen in the last 35 years. The only comparable period occurred briefly in the spring of 2020, during the peak of pandemic-induced panic when oil prices briefly turned negative.

The current boom signifies a substantial deviation from typical market dynamics. The extraordinary purchasing power of gold relative to oil suggests a significant economic narrative unfolding, drawing attention to the volatile nature of global commodity markets.