Turmoil on global commodity markets has pushed gold to an unusual record high price – one ounce now costs more than 40 barrels of crude for the first time since the Victorian age.
The rising cost of the precious metal relative to oil is seen by some as a sign of stress in the financial markets and world economy.Deutsche Bank analyst Jim Read said gold is now at its highest level relative to oil since his records began 150 years ago.
Gold has risen 17.5 per cent since reaching a six-and-a-half year low in December and is now valued at around $1,235 an ounce. It is up 16.3 per cent this year. By contrast, the price of oil has collapsed on the back of weak global demand and plentiful supply.
It is down around 15 per cent this year and more than 70 per cent since summer 2014 when it was worth $115 a barrel. Brent crude was trading at around $32 a barrel last night while West Texas Intermediate was below $29 a barrel. Nervous investors have piled back into the traditional safe haven of gold as they sell risky assets and look for somewhere to put their cash. However, bullion is still well below its 2011 peak of nearly $1,900 an ounce.
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