Since the blockade of the Strait of Hormuz due to the US-Israeli military conflict with Iran, the gold price appears to react highly sensitively – and negatively – to rises in the price of crude oil. Are these two commodities in fact in negative correlation, as the price trends of recent weeks suggest? And if so, why? An answer might be found in the long-term price ratio between gold and crude oil, and could also explain the current situation for both commodities.
Development of gold-to-oil-ratio over the past 80 years
Since the end of the Bretton Woods system in 1973, which had pegged the US dollar to the gold price, one ounce of gold has typically equaled the value of 10 to 30 barrels of crude oil. From 1970 to 2010, the average stood at 17 barrels. In the 1960s and early 1970s, the oil-to-gold price ratio, calculated daily as the WTI/Gold ratio (Western Texas Intermediate), stood at just under 11 barrels per ounce of gold. In the 2010s, the WTI/gold ratio rose to an average of 14.8 before reaching its provisional peak of 30.66 during the crisis years since 2020. The year of the COVID pandemic outbreak saw the ratio rise above 90. Since 2024, it has ranged between 27 and 39 barrels per ounce.
Gold remains strong despite oil price rally
The price of crude oil, which has intermittently risen by over 50 percent since the blockade of the Strait of Hormuz, is fueling widespread – and realistic – fears of high inflation rates across many sectors. This development is also weighing on gold prices, as rising inflation typically entails interest rate hikes, rendering government bonds and money market products more attractive than gold. Nevertheless, the WTI/gold ratio currently (as of 8 May 2026) stands at almost 50 barrels per ounce of gold. The precious metal has therefore significantly outperformed oil over the last 80 years, a development which puts the recent gold depreciation into perspective.