If oil and XAU have a long term relationship, like most commodies do, then if oil is at 47 dollars and the gold and silver index is typically about 3.25 X oil price per bbl, then the XAU would be ~ 152 pts. today. In rough estimate that suggests gold would be about a 1/3 more costly than it is today, or ~ 540 dollars per oz.
Of course, if oil falls in price that number would decline. Do I think it probable? No, but it is something to think about if oil prices stay where they today. We might just get there. Best Islander.
All else equal:What would the XAU read if..
Started by
Islander
, Aug 21 2004 10:08 PM
1 reply to this topic
#2
Islander
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Posted 22 August 2004 - 02:07 PM
I sorry for the heading. I mean what would gold cost today if oil were 47/bbl. I am suggesting that gold could climb steeply if its traditional relationship holds.
