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  • #61
    Thanks kbird. Here's a long term chart of gold vs oil

    How-Do-Oil-Prices-and-Gold-Prices-Relate.jpg

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    • #62
      Originally posted by thriftyandboringinohio View Post
      Thanks kbird. Here's a long term chart of gold vs oil

      How-Do-Oil-Prices-and-Gold-Prices-Relate.jpg
      Thrifty, I want to note that your chart from beginning to end took place in the era where the USD has been the reserve currency of the world. Over the long-term, the prices of oil and gold have tended to move together.

      If gold doesn't re-enter the financial system as a reserve asset, it probably makes sense to own both gold and oil.

      If gold does re-enter the financial system as a reserve asset, which is a scenario that Russia and China and other countries buying gold seem to be preparing for, I would think that the gold/oil ratio would expand significantly and gold would far outperform.

      I own both, but more gold than oil.

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      • #63
        i believe the commodity exchanges have the right to settle contracts in cash if they can't do delivery. thus, if there's no physical in the warehouse, the settlement is at whatever the paper market says it should be.
        I think that's correct. I seem to remember reading that what crushed the Hunt brothers when they cornered the market on silver was that the rules were changed such that demands for physical delivery could be abrogated and those on the hook for delivering silver could close the contract by paying the paper price.

        [I don't recall seeing this thread at all last year. The re-do of the web site has seemingly blocked me from seeing a lot of content.]

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        • #64
          meanwhile the price of gold is weighed down by the huge paper market, which appears to be suppressed by the desire to prop up the appearance of value in the dollar. and meanwhile russia buys physical gold with the dollars and euros used to buy its oil and gas. similarly export revenues are used to buy gold by kazakhstan, china, turkey, india, serbia, thailand, ghana,....

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