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Learn About Gold Bullion Vs. Oil Futures Directly At

Gold bullion and oil often have a negative price correlation. That is to say when oil goes up because the economy is humming, gold tends to correct. When the economy is doing badly the demand and price for oil goes down; this is often when the price of gold bullion goes up. Sometimes for the gold bullion investor, it is useful to look “outside of the box.” In this case it is useful to analyze what is happening in oil futures.

As of January 28, 2010 a chart of COMEX oil futures going out ten years are nearly flat! Light sweet Texas crude for March delivery is trading at just below $75 a barrel. December 2010 delivery is trading around $78. December of 2018 is trading around $97 a barrel. What this suggests to the trader in gold bullion is that people setting prices in the oil market do not seem expect an economic recovery of any substance in the next ten years!

Nations throughout the industrialized world have taken on huge amounts of debt to prop up their banking systems and to stimulate their economies. This puts another weight on the world economy and threatens to devaluate currencies long term. The oil producers need high demand to keep prices rising and economic difficulty stifles that demand.

The point for a gold investor is to look at the factors that drive the US economy, for it is the continued struggle of the US economy and the dollar that tend to drive up the value of gold. Investors can look to oil futures and other investment vehicles for possible clues about how to best plan their investment strategy in gold bullion or rare coins. 

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Jonathan Monroe

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