i have a question from sometimes that why is it when oil prices increase the price of Gold's price also increase; both has a direct relations! i used Google search engine but was not convinced so if some one is from this field may be he would gave me great answer... Regards
As far as I am concerned it depends whether true causes are simple or complex . If the price driver is simple --- Libyan war but not much new on the economies front --- then oil supply is down , the Oil spot price goes up and Gold and Silver are pushed higher . However , if the Prices driver is complex -- say the current EU and US financial crisis but without Oil supply differences , the Oil price will remain fairly unaffected , but Gold/Silver will rise for reasons completely unaffected by Oil supply ( assumes demand here remains short term steady). It is a bit crude (!!) but whilst I am a trader in both Gold and Silver , I am only a general Oil Price observer .
let me tell you something.......in 1971 when Nixon went off the gold standard the US made a deal with saudi arabia....accept only US dollars and we will protect you from invasion. So it can be argued that since 1971 the US dollar is indirectly backed by oil. Now why is it that as oil rises so does gold? It really depends on why oils is rising.......if its rising because of political instability it can be argued that there might be a threat to that sweetheart deal to back oil with dollars ( since most OPEC nations only take dollars for oil). Another reason is that as oil rises then the US balance of trade also rises so more dollars are needed to purchase oil, hence the dollar loses value and so of course gold will rise accordingly. There is another reason though.....since 2001 when saddam husein stopped accepting dollars for oil many other nations have followed suit.....Iran no longer accepts dollars for oil.....neither does Venezela......also now china is making non oil deals in the pcific rim to trade with yuan instead of dollars. In short.....Sadam may have opened pandora's box in starting the demise of the US dollar! I guess time will tell!
Let alone our dear departed pal , Mister Gadaffi . Many believe that his number was finally " Up" when he touted Africa in toto to move away from the $US for Oil dealings .
have you noticed that all nations that threatened the stability of the dollar eventually gets invaded? This is why I am quite sure that sooner or later Iran is next as they too no longer accept dollars for their oil!
You got it , spot on . Do you recall some of my other repeated posts ---- let the $US drift down to reduce debts , but use global war to keep the economy running and invest in countries that they fick stupid , to reap dividends when their assets later increase in value . Example , Iraq . Invest $ one billion when the country was a battle field . Recoup now , when those investments are worth $140 billion. Pays for Syrian regime change , if you can get mug punters to fund the cash .
Is `cause oil is called black gold (Texas tea)... ... so when the price of one goes up... ... the other goes up as well. Ya'll come back now, ya hear?
The oil price of gold, as well as the gold price of oil, remains relatively stable. it is the oil and gold price of the dollar that changes.
its not the quantity but just the fact they dare challenge the status quo! Sadaam opened pantora's box and I doubt it can ever be closed again!
according to many books written on this subject....yes it was....the US knew they had to get off the gold standard as the vietnam war was costing them billions and many central banks were cashing in their dollars for gold. But first I think it was kissenger ( or someone else) went to saudi arabia and struck the deal...this kept the demand for dollars intacked as saudi arabia even then was the largest producer of oil!
you can even price gold to loafs of bread.....in 1930 a loaf of bread was 8 cents and gold was 35 dollars so you could buy 440 loafs of bread....today a loaf of good quality bread at a baker can cost around 3.25 dollars so at 1600 you can buy 450 loafs more or less. So you see, gold more or less holds its value with only slight variations!
The value of oil or gold has not changed in a hundred years. It is the value of the dollar that has changed. There is not much value left. The price of oil and gold do not rise, the value of a dollar falls.
Whether you agree or not with the proposition , you miss the point judging by your comment . It is not the export quantities that are important . It is the principle of other regimes rejecting the US $ as the means of payment . Do that , and you are walking dead .
