With futures hitting $1,000 per ounce, more investors seeking out gold

…Two elements will continue to contribute to a rising gold price for the foreseeable future, he said. The first one is a rising oil price.

“Production is in decline. We hit peak oil production apparently in February 2006 … (Meanwhile) demand is rising” in North America, China, India, Russia and Brazil.


“That situation isn’t going to be corrected in any way in the foreseeable future,” said Barisheff. “Even if we found a huge oil field, it would take between five and ten years to get it into production.”

The rising oil price has two implications. “It’s highly inflationary because oil is used in everything we do or make or eat,” he said.

Secondly, “over the very long term oil and gold are somewhat correlated in that they move in similar directions. And over a very long-term average, you could look at about 15 to one in terms of pricing,” said Barisheff.

“Right now gold is under that ratio at about nine to one so it’s got some catching up to do relative to the oil price.”

Brandon Sun