Spot Chart | Econocasts: 2014.04.25 <b>Gold</b> Cycle Model <b>Chart</b> | News2Gold |
| Econocasts: 2014.04.25 <b>Gold</b> Cycle Model <b>Chart</b> Posted: 26 Apr 2014 07:41 AM PDT
The gold cycle model suggests we may have passed an intermediate low for gold prices. Currently, the model is predicting a gold price of $1750 at the end of 2014. While this has been a good model thus far, I want to enter a caveat - which is that the silver cycle model does not corroborate it going forward, at least by historical gold:silver ratio. You can find all the previous gold cycle models in the archives, and the last iteration is below. Note I have changed the time scale and price scale to accommodate forward price action.
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| <b>Chart</b> of the week: <b>Gold</b> still looks cheap - MoneyWeek Posted: 27 Apr 2014 01:00 AM PDT
Gold investors often look at the relationship between the price of gold and the price of oil. The theory behind this is that there is a strong relationship between the two commodities. The oil price is seen as a major driver of inflation in an economy (oil is a key raw material, so if its price rises then the price of almost everything else will be affected too). In turn, gold is seen as a good hedge against rising or very high inflation, so rising oil prices should in theory boost the price of gold too. When the ratio of gold prices to oil prices is high, gold is viewed as expensive relative to oil as it was in the mid-1980s and the late 1990s. The average ratio since 1970 is just over 15 compared with 12.4 times now, suggesting that gold may be a little on the cheap side compared to oil (as measured by the West Texas Intermediate (WTI) benchmark) – though that could equally be corrected by the oil price falling rather than gold rising. • Stay up to date with MoneyWeek: Follow us on Twitter, Facebook and Google+ 
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