Metal to Oil Ratio

Consider an important commodity, oil, and how that varies in relation to gold and silver.

At the time of writing, the WTI crude price is $59.79, and the Brent crude price is $63.67.

Also, the gold to oil ratio (G/O) is historically on average between 10 and 30. We will assume G/O = 20, and therefore, G = 20*O.

Similarly, for silver, the silver to oil ratio (S/O) averages about .25, so S = .25*O.

Therefore, some valuations for gold are, 20*$59.79 = $1,195.80 / troy oz and 20*$63.67 = $1,273.40 / troy oz.

For silver, some valuations are, .25*$59.79 = $14.95 / troy oz and .25*$63.67 = $15.92 / troy oz.

If we further average over the WTI crude and Brent crude valuations for each metal, we get a valuation for gold of $1,234.60, and a valuation for silver of $15.43.

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