So the historical relationship between gold and crude oil is that an ounce of gold will usually buy about 15 barrels of oil. Using this math right now, it gives us a price of about $43 per barrel. A barrel of oil is about 5.8 Million BTUs or should be about 5.8x the price of NG approx. 5.8*NG right now gives us about a $41 barrel of oil. These spreads seem at very stretched levels. What are your thoughts on this spread coming in in the next 6 months? What would your opinion on a long gold, short 2 oil, long NG trade right now to play the spread coming in?
Historical precedence is meaningless when the world is running out of oil.. http://news.independent.co.uk/sci_tech/article2656034.ece
I don't think that analysis is correct, industry rely on oil not gold. gold is mostly used at a method to store value.
here is an old article on the gold - oil relationship www.zealllc.com/2005/gorex3.htm you might just want to try the crude - nat gas spread but using QM and QG ( mini contracts ) and adjust accordingly just be careful as the history books are littered with traders and the spreads that crushed them good luck ps I think the CL - NG spread was even wider late last yr