Gold Crisis and Inflation Hedge Expected to Outperform Crude Oil
1. Introduction
Over the last 7-8 years, gold has consistently underperformed oil. Gold bulls are worried – after all, why invest in gold, when oil delivers a better performance, and so are apparently copper, uranium, and a number of agricultural commodities. The answer is simple – during the early stage of this commodity bull market (2000-2006), the fundamentals of oil were much better than gold. However, the relative fundamentals will reverse in later stages, when gold will dramatically outperform oil. This is simply the nature of the current commodity bull market.