Gold/Oil Ratio 29 January

Given the interest being shown in these two owing to the threat of war and the prospect (some mistakenly believe) of inflation, I'm going to show you what's happening for as long as there is an interest. For the exercise I shall be using the gold/brent crude ratio because Brent trades during the time I'm on the job.

On a daily view investors/speculators are banking on gold as a better place to be than oil.

GOLD/BRENT CRUDE RATIO

DAILY (closed 11.96): 34 day indicator rising at 25.2...daily mesa has top today and a low 20 Feb...attached daily chart shows the ratio has reversed its downtrend from its November high and is through its tandem moving average signalling that gold is beating Brent....the ratio has so far reached 12.01 which is the 38.2% Fibonacci retracement of the decline with 12.39 and 12.78 being the 50% and 61.8% retacement levels. The chart also shows that gold is holding its uptrend (reverses down through 360+-) and that Brent has dropped to test its rise from its November low (reverses down through 30.00+-).

Hourly(11.97 at 0500GMT): 34 hour indicator getting overbought at 97.7...hourly mesa high at 0900GMT 3 Feb...attached hourly chart shows the ratio holding its uptrend but needs to beat 12.01 to keep rising whereas it starts downside reversal through 11.80 and if 11.80+- taken out it could go much lower....meanwhile gold would go lower if it takes out 366 support and Brent would need to take out 30.71 to point lower.

On a daily view the ratio has the potential to go higher as gold outperforms Brent crude but on an hourly view the ratio is overbought and so we watch for signs of a downward counter trend move....watch to see if the ratio should take out 11.88 on an hourly plot basis. In the ultra short term gold goes lower below 366 and Brent lower through 30.71.