Black Or Yellow? The Tight-Range Technicals
Gregory W. Harmon | Sep 05, 2014 09:10AM ET
Both commodities, Crude Oil and Gold, have their dedicated followers. Indeed, they're the most active commodities traded. They can be influenced by geopolitical situations, economic conditions, inflation and public policy among other things. There is nothing to say there is a long-term relationship between the two and that makes sense. One gets its value as a result of supply and demand for it and and other energy resources. The other gets its value from who knows what.
But there has been an odd relationship between them over the past 14 months.
The ratio of Crude-Oil-to-Gold has stayed in a very tight range over that time frame, which followed a 2-year period when the price ratio was all over the place. It traced out a bearish Gartley harmonic and pulled back before rocketing higher to the consolidation zone. With a bounce off of the bottom of the zone, it looks like a good time to buy Crude Oil against Gold for a run to the top and maybe higher.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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