I noted in a comment that the price of Gold just exceeded the price of Platinum today. Both are relatively scarce metals that have significant industrial uses beyond just being a way to “store” wealth. They should, in theory, move up and down together. My impression was that Platinum typically trades about 40% above gold.
Another “ratio” that gives a hint of what’s going on and isn’t based on the value of the dollar and as such is beyond the control of the US Treasury and the Fed – at any moment in time, how many barrels of oil will one ounce of gold buy? Both are valuable, easily traded commodities with an obvious source of value. Crude Oil is however 100% consumed in the short term and vital to any economic activity. The Gold/Ratio should stay fairly stable, unless either 1) the supply of oil is about to be disrupted or 2) demand for oil is going to drop 3) people are rushing into gold and bidding up its price
Right now, Gold is $1,780 an ounce, Brent Crude is $107 That gives you a ratio of about 16:1
Seeking Alpha has this chart from earlier this year:
The big spike in the ratio is right at the September 2008 financial markets crash. The blue line is the Moving Average to smooth out the short term ups and downs. If you want to play along at home, just divide those two numbers and see how they change over time.
I’ll try to find a chart of 2011 or create one rather than using someone else’s work. Seeking Alpha is an interesting website to watch things – just keep in mind they are there mostly to entice you into playing the game of trading in options and commodities, which I strongly discourage you from doing.
The general idea is – if the Gold/Oil ratio is staying relatively steady, but the price of gold is going up – what is really happening is the value of the dollar is going down.