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Oil vs. Gold: Why the Commodity Ratio Has Plunged to Its Lowest in History?
A look at five historic phases of the oil-to-gold ratio and where this commodity indicator may head next in the current macroeconomic uncertainty
The oil-to-gold price ratio, a barometer of relative commodity value, has long been a tool for economists and investors to gauge the interplay between two of the world’s most critical assets: oil, the lifeblood of the global industry, and gold, the timeless safe-haven asset. In April 2025, this ratio plummeted to a historic low of 0.64 grams of gold per barrel of oil, a staggering 49% below its pre-Bretton Woods average from the 1960s.
This dramatic shift underscores a profound divergence in the trajectories of these commodities, driven by macroeconomic shocks, geopolitical events, and evolving investor sentiment. To understand this moment, we must trace the ratio’s evolution through five key phases, identify the primary driver behind its recent decline, and explore what the future might hold as investors increasingly turn to gold amid global uncertainty.
Understanding the Oil-to-Gold Ratio
Before delving into the historical trajectory, it’s essential to understand what this ratio…
