The prices of oil and gold have surged since the start of the year. However, we do not think that the co-movement is necessarily linked. Admittedly, tensions in the Middle East are a common upward driver of both prices, but the rally in the price of gold so far this year has also had a lot to do with a jump in Chinese buying, while OPEC+ output restraint is propping up oil prices. We think that both prices will end the year lower but for different reasons. What's more, we expect gold to outperform oil in 2024-25 and the gold/oil price ratio to rise.
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