The Interrelation between Prices of Gold and Crude Oil

Abstract

The paper analyzes the relation between the prices of crude oil and gold prices. The purpose of the paper is to establish the determinants, co-movement, and the character existing between the two prices. The paper looksthrough the crude oil and gold pricestraded in different regions for the past twenty years. The relation existing between the price levels of gold and oil is analyzed using the gold to oil ratio, which is calculated as part of the price of gold to the price level of crude oil during the same period of time. Further, a correlation analysis test is adopted to establish the strength of the gold and crude price relationship.