The Gold/Oil ratio would resume a positive fundamental tailwind for the gold mining sector if it breaks out.
As crude oil/energy is a large part of gold mining cost structures, the Gold/Oil ratio is pretty important fundamentally, wouldn’t you say?
Though not shown on this daily chart, the dashed resistance line is actually long-term and important resistance, if you believe a ratio can have support/resistance. I do, because it is the product of two nominal markets. There’s just a little more cross talk in the signals.
Macro fundamentally, if the Gold/Oil ratio does break out and head higher we’ll have another counter-cyclical signal in play as well.
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