Tuesday, 21 February 2012
Will oil become even more expensive versus gold or will China prevent this
The chart shows the rise of the oil price (Brent) versus gold in periods of six months. When you see the fluctuations nobody will be surprised when the oil price rises another 10% versus gold. When the oil price starts to rise versus gold you normally see quite a big run.
But lots of people think the commodity world turns around China and especially from the Money growth of China. That should mean that the oil price has now risen enough, given the poor growth prospects of China while Europe is in a recession and the US drinks less of gasoline. So the oil price should fall.
The price momentum shows the market is thinking now that the situation in Iran is no longer controllable or because what Iran is doing or because of what Israel will do.