- The long term trend for oil is clear, but short term moves make it a great trading asset.
- Gold is in a decline as the global economy looks stable and yields are slowly increasing.
- A quality miner with dollar cost averaging might be the best gold diversification option.
Two indicators that can give us insight into how the global economy is doing are gold and oil.
Estimations from various analysts are all over the place for both commodities, some say gold will be at $1,900 in a year or two and oil at $100 while some see oil below $30 or even worthless and gold at $800. What will happen is anyone’s guess as the factors that will influence the outcomes are as yet unknown. As an example, nobody knows if Russia or Iran are going to increase oil output or if additional supply from U.S. shale will be enough to push prices down again. Nevertheless, a look at price movements from the two commodities can give us some interesting insights into the short term expectations and aid us in the assessment of risk. More →