In human society, both in the past and in the present, gold and oil have played extremely important roles: gold is a recognized currency, and oil has gradually become the blood of modern society since the industrial revolution.
Gold and oil have similarities in price fluctuations. For a long time, although the rise and fall of gold prices and oil prices are not the same, the two are inextricably linked.
Petroleum, also known as crude oil, is mainly used as fuel oil and gasoline. Fuel oil and gasoline constitute one of the most important primary energy sources in the world.
The distribution of crude oil In general, the two major oil regions of the Persian Gulf and the Gulf of Mexico and the North African oil region have concentrated 51.3% of the world's oil reserves; the main oil-producing countries are the United Arab Emirates, Saudi Arabia, Kuwait, Iraq, Iran, Russia, Sweden Nella and other countries.
Like gold, the status of oil is very important today and even in the future. Oil is an important strategic material for the operation of contemporary industrial society, a non-renewable resource, and an actively traded product in the international market.
Since the Western Industrial Revolution, black gold (oil) has been an important strategic material for the operation of modern industrial society, and oil plays a pivotal role in international politics, economy, and finance. The appearance of the term "petrodollar" is enough to Explain the importance of oil in today's world economy.
Like gold, oil, as a non-renewable resource, plays an important role today and in the future.
We know that increasing gold reserves is regarded by various countries as an important means to protect their own economic security and deal with inflation. Therefore, oil and gold are used by countries all over the world as their own strategic materials for strategic reserves.
From a historical perspective, the relationship between gold prices and oil prices can be roughly divided into the following stages:
The first stage: the period of stabilization before the collapse of the Bretton Woods system.
The second stage: the rising period from the early to mid-1970s.
The third stage: the rising period from the mid-1970s to the 1980s.
The fourth stage: the downturn of more than 20 years since the 1980s.
The fifth stage: the rising period in the early 21st century.
From the "World War II" to the 1970s, the ratio between oil prices and gold prices remained almost unchanged, basically maintaining a stable relationship of 1:6, that is, the exchange relationship between gold and oil was about 1 ounce of gold for 6 barrels of oil.
The Bretton Woods system collapsed in 1973, and the original 1:6 relationship between oil prices and gold prices no longer existed. After gold rose for several years, oil prices also started to rise. But since then, the momentum of rising oil prices has basically caught up with the previous momentum of rising gold prices.
Mainly affected by the second round of dollar depreciation and the second world oil crisis (1979~1980), in this round of gains, gold took the lead in rising sharply, followed by oil, and both reached the highest prices in history. This period restored the relative balance and parity of the value of oil and the dollar.
Prices have fallen since 1981, and during the 20-year period of low prices, gold and oil have not always been in a downward trend. Stimulated by international events, the price of gold and oil rose for a short period of time, but unfortunately they were unable to maintain it.
The re-rising stage since the end of the 20th century, this period has experienced war events, and oil prices have continued to rise. Due to the constraints of international conventions, the European Central Bank's selling of gold has been curbed, and the price of gold is in a stage of steady rise.
As gold and oil, which are actively traded in the international commodity market, their price changes will affect the world economy. The relationship between them is worthy of our study, and the relationship between the two is ultimately the US dollar as the medium, that is, the trend of the US dollar. The rise and fall of oil prices will have an impact on the rise and fall of oil and gold prices, and fluctuations in oil prices will have a direct impact on the economic development of the United States.
Specifically, oil and gold are settled in the US dollar in the international market, and the rise and fall of the US dollar will have an impact on the rise and fall of oil and gold prices.
Then, fluctuations in oil prices will have a direct impact on the world economy, especially the economic development of the United States, which has the largest economic aggregate and crude oil consumption in the world. Prices of vital commodities such as oil and gas rose and fell.
According to estimates by the International Monetary Fund, every $5 increase in oil prices will reduce the global economic growth rate by about 0.3 percentage points, while the US economic growth rate may drop by about 0.4 percentage points. When oil prices continued to soar, the International Monetary Fund immediately lowered its forecast for future economic growth.
It can be seen that oil prices have become a "barometer" of the global economy, and high oil prices also mean that economic growth uncertainty has increased and inflation expectations are gradually heating up, which in turn pushes up gold prices. Therefore, there is a positive correlation between gold and oil, that is, the rise in oil prices indicates that the gold price will also rise, and the decline in oil prices indicates that the gold price will also fall.
In the medium and long term, the fluctuation trend of gold and crude oil is basically the same, but there are differences in magnitude. However, the price fluctuations of gold and oil in US dollar terms are relatively stable.
Risk reminder: remember to take profit and stop loss when trading, and put risk management first.
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