Crude oil and gold are positively correlated, and the rise in oil prices indicates that the price of gold will also rise. In the medium and long term, the fluctuation trend of gold and crude oil is basically the same, but the amplitude is different.
The positive correlation between gold and crude oil prices is mainly caused by the following factors:
(1) International gold and crude oil prices are all priced in US dollars, and the fluctuation of the US dollar exchange rate will directly lead to the same fluctuation of gold prices and oil prices.
(2) High oil prices will aggravate inflation and lead to an increase in the price of gold.
(3) The fluctuation of crude oil price directly affects the operation of gold in oil-producing countries, which leads to the fluctuation of gold price. When the international gold price fluctuates, their operations on petrodollars tend to be in the same direction.
In order to transfer risks, crude oil exporting countries often invest a huge part of petrodollars in international financial markets, and gold, as an excellent tool to avoid risks and preserve investment, is naturally within the choice of these crude oil exporting countries.
During the period of rising crude oil prices, the crude oil dollars held by oil-producing countries will expand rapidly, so these countries will correspondingly increase the proportion of gold in their international reserves and increase the demand for gold in the international gold market, thus pushing up the price of gold. It is these crude oil dollars from the Middle East that promote the growth of gold investment demand, thus promoting the rise of gold prices.
The pricing of the international crude oil market is based on the standard oil in the world's major oil-producing areas. For example, on the New York Futures Exchange, crude oil futures are based on "WTI" produced in West Texas, and all crude oils produced or sold in the United States are priced based on light and low sulfur WTI. Due to the strength of American super crude oil buyers and the influence of New York Futures Exchange itself, crude oil futures trading based on WTI has become the leader in global commodity futures trading volume.
Generally speaking, this kind of crude oil futures has good liquidity and high price transparency, and is one of the three benchmark prices in the world crude oil market. When the public and the media usually talk about how many dollars the oil price has exceeded, it mainly refers to this price. However, more than two-thirds of the world's crude oil trading volume is not based on WTI, but on Brent crude oil in the North Sea, which is also light and low in sulfur.