Gold Cheap Versus Oil Signals Bullion to Rally
Gold, trading near a record high, will outperform oil as surging inflation underscores the metal’s role as an investment hedge, according to Credit Suisse Group AG.

The CHART OF THE DAY shows prices of gold for immediate delivery and New York-traded crude since 2008. The lower panel tracks the ratio of gold to oil, which shows an ounce of bullion buys about 15 barrels of the fuel now, compared with 26 barrels two years ago.

“We see potential for gold to outperform oil over the coming months,” Stefan Graber, Zurich-based analyst with Credit Suisse, said in an e-mailed interview yesterday. “We think an ounce of gold could potentially buy a few additional barrels of oil. This assessment is based on our positive view on gold versus a neutral view on the oil market.”

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