The chart above shows the ratio between the price of Oil to the price of Gold. As you can see, it’s been ten years since oil was this cheap relative to the price of gold.

Back in 1999, oil bottomed at about $10 per barrel. It subsequently tripled in price over the next year-and-a-half.

I don’t expect a repeat performance but I do believe oil is oversold and overdue for at least a bounce. And if the economy begins to recover it may lead to more than just a bounce.