Back in September, I wrote an article titled “All That Glitters“, and expressed my thoughts on gold as an investment. Recently, I’ve seen more charts that compare the price of oil and gold by forming a ratio, the number of barrels of oil that an ounce of gold will buy. First, on CNBC’s Kudlow and Company, and more recently in an Economist article borrowing my September story’s title. From that article, I offer this chart:
What conclusion do we draw from this chart? Gold priced too low? Oil too high? I believe both are in bubble territory, each for its own reason. Only time will tell who is the right prognosticator.