GOLD to OIL prices the RATIO ANALYSIS ( and meaning )

GLD/USOArca

Description

⋅ Jul 30, 2023 8:39 AM

GLD is an ETF tracking gold futures prices across a blend of durations. USO is a similar ETF

for crude oil. I was interested to see what the ratios look like and considering the trading

advise of buy low should I be trading and bartering gold to get oil or viceversa. It is applicable

for be because I am in part a commodities trader and has some activities on the leveraged forex

market.

On the daily chart dressed with a set of two long term anchored VWAP standard deviation lines ,

and some horizontal static resistance lines added, it is obvous to me that the ratio is

currently sitting on the mean VWAP band for support confluent with the lower trendline

of the ascending megaphone pattern which is typically considered demostrative of increasing

volatility. I conclude that if I am a barterer I should trade my oil for gold. If I have gold only

and dry powder I should increase my gold holdings. If I prefer trading oil I should short the

market. This is because the ratio is set up to rise. The means that gold will rise or oil will

fall or some hybrid combination of that. My entry here is when the volatility on the indicator

is green and crosses over the running average.

This is a simple demonstration of how charting with TradingView can help a trader make well-

grounded and profitable trading decisions while lowering risk and making profits more probable.

What do you think of this analysis? What are your agreements or disagreements with it?

Comments

UnknownUnicorn13101

⋅ Jul 30, 2023 4:38 PM

I agree with this excellent point. I see the ratio rising in the very near future. I ran a weekly chart of GC/CL (gold/crude futures) with volume profile and here's what I found: the weekly ratio peaked on 4/2020 (COVID scare), declined, and formed a double bottom ranging from 10/2018 (which is last FED rate hiking cycle) and 6/2022. Currently the ratio sits just immediately below the POC, but there is ample volume support below. I see a higher potential for upside in this ratio, particularly since we are entering a period of positive seasonality for gold (in USD). I believe both gold and crude can rise, but gold can rise at a faster rate, a lot depends on the future action of the dollar --- I charted a weekly on the dollar a while back which looks to be a huge head & shoulders pattern. If that plays out, the dollar declines, and gold, oil, and the ratio all rise.

AwesomeAvani

⋅ Jul 30, 2023 5:53 PM

@Dan_B_Cooper, Without,your analysis is as deep as I have ever seen. I knew dollar value has a role and just figured it would affect all commodities to a similar degree. With the ballooning of the national debt and the interest on it primarily the fed printing more money to dilute the impact a root cause of inflation. I am an old timer (67 years old) and collected real silver coins when I was a kid. I have to wonder how different the world would be if Nixon had not abandoned the gold standard. Not having any formal education in economics I cannot really guess but my hunch without any fluency is that it would be way better. Globally, the middle class might be much bigger and not challenged or stressed and the underclass much smaller. I have gold kilobars on my trading desk as paperweights next to my printer. Someday, I will call myself finished and trade them in for a nice live aboard sailboat and its dockage. Que sera sera.