In summer 2005 a troy ounce of gold cost about$440. Today the price is 3,4 times as big. Such an increase cannot but suggest: Maybe this is the best gold can do? Maybe the prices will start rapidly falling down? The similar picture could be seen in the crude oil market in 2008.
The current situation is different from the one that was seen 3 years ago. Taking into account the growing inflation pressure and the current USD exchange rate, gold hasn’t still reached its all-time price record of 1980. The situation with crude oil was different: the prices grew in early 2008 and started falling after breaking above the high while being pressed by inflation. Gold well may face the same situation but anyway it is better to wait until the prices break above the record level of $1945 per troy ounce.
Having considered the situation that took place 5 years ago it is possible to understand that the end was quite logical. By the moment of the price collapse crude oil had already grown in value by 340%. So far gold has gained only 150%. Probably it is not in a hurry to follow the path of crude oil.
For the last couple of decades the ratio of gold and crude oil prices has been around 15.4. From 1986 till 2000 crude oil was growing in value faster than gold. The ratio was above the average. In August 2008 crude oil made a price sharp collapse while gold kept growing in value – the ratio exceeded the average level once again. Since then both crude oil and gold have been growing in price against the background of global economy recovery while the ratio has been below the average.
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