Gold vs Oil | When the Ratio Tells a Deeper Story Than Prices

This chart shows the evolution of the gold-to-oil ratio since the early 1980s, using two measures: linear and logarithmic.
The data is the same, but the story it tells is radically different. Both perspectives are important.

1980–1990: A World Tending Toward Balance
Over nearly two decades, the ratio moved within a relatively narrow range.
Oil was abundant, OPEC held clear pricing power, and inflation expectations remained stable.
Geopolitical shocks – Gulf War, Asian crisis – caused sharp jumps, but they were temporary and quickly reverted to the mean.

2000–2008: The Commodity Super Cycle
Rapid manufacturing growth in China changed the global energy demand equation.
Oil outperformed gold, and the ratio declined with a narrative of energy scarcity and real growth dominating economic thinking.

2008–2014: Financial Crisis and Risk Repricing
The global financial crisis re-priced systemic and monetary risks.
Gold surged strongly, while oil recovered supported by stimulus and growth.
The ratio increased but remained within known historical bounds.

2014–2020: Shale Oil Sets a Cap
U.S. shale oil introduced unprecedented flexibility on the supply side, capping prices and long-term volatility.
Meanwhile, gold maintained its value amid ultra-loose monetary policies.
The ratio gradually rose without breaking out of historical patterns.

2020–2022: Mechanical Anomaly
The sharp rise in the ratio coincided with WTI futures prices turning negative in April 2020.
What happened was not economic equilibrium but a market structure disruption caused by storage constraints and forced liquidation of futures contracts.
Except for this extraordinary event, the ratio has never historically reached such levels.

Today: A Historic Level… Even Without 2020
Excluding the negative price episode, the gold-to-oil ratio remains at the highest sustainable level in recent history.
We are not facing a temporary panic peak but a structural disconnect.
• Gold prices long-term monetary risk and ongoing monetary expansion.
• Oil is still priced as if supply is infinitely flexible, with geopolitics being a secondary factor.

Why is the logarithmic scale important?
Because it reveals the picture clearly:
Even after removing the distortions of 2020, oil remains historically cheap compared to gold.

Returning to the mean does not necessarily mean gold will fall.
It means oil needs to be re-priced.

Summary
The 2020 spike was a transient event.
What we see today is a structural shift.

And history shows that gaps of this kind rarely close quietly.