Chart of the Week: Oil Priced in Gold Breaking Down

Oil in Gold Terms

Chart of the Week: 100 Barrels of WTI Crude Oil Priced in Ozs of Gold

It is common to find charts measuring the number of barrels of WTI that it takes to equal an ounce of gold. I prefer to look at the relationship between the two as oil priced in gold, where gold in the denominator functions as a universal currency against which to measure oil’s strength/weakness.

To keep the numbers whole, I measure 100 barrels, and not one.

The ratio has been in a wide ranging downtrend channel for a decade, with a countertrend move beginning in early 2016. That move broke its uptrend channel in December, pulled back to retest prior channel support, and has since broken down again on recent trading action. This breakdown is bearish for the ratio, which translates to a long gold, short oil bias over the near to intermediate term.

About the author

I am the founder of fibonacci.com and an avid trader. I am also the co-founder of Texas Precious Metals, a top US precious metals company. In 2006 I was a contestant on The Apprentice with future president, Donald Trump. I live in Coeur D'Alene, Idaho, with my wife and five children, where I spend my time hiking, charting, and changing diapers.

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