HSBC chief precious metals analyst James Steel says oil is a fading — and sometimes misleading — guide to where gold is headed.
The oil-gold correlation was strong in the 1970s and 1980s, but since then it has weakened and even turned inverse at times; gold now answers far more to the US dollar and other drivers than to crude.
Steel adds that oil’s influence on equities is another channel muddying the signal for gold investors.
The piece appears in the latest issue of the LBMA’s Alchemist magazine, where Steel unpacks why the two commodities have drifted apart.
