However, O’Byrne said that, “While oil remains an important factor in influencing the gold market, we remain confident that there will be a gradual decoupling between oil and gold in the coming months.”
Gold will outperform oil, O’Byrne maintains, since oil is a commodity that is “far more subject to demand destruction in the face of a sharply deteriorating global economy than gold.”
And Credit Suisse analysts wrote that gold prices are taking direction mainly from the euro/dollar exchange rate and U.S. bond yields. Since gold is a non-yielding asset, rising bond yields are a negative for the metal.
But Credit Suisse believes that a renewed test of $1,000 an ounce is “increasingly likely during the third quarter,” and that “the rally will likely start turning into a consolidation as we move into the fourth quarter.”
Puru Saxena, an analyst and advisor writing from Hong Kong, on Wednesday morning made the following astute observations, "As we have seen from the recent stock-market debacle, we are truly at the dawn of a rare moment in stock market history. Imagine what will happen to stock markets when oil hits $200 or $300 per barrel?
"What most investors don’t understand is that oil—above every other commodity on the planet—is the blood supply of global growth. Without it you can’t build factories, ship goods, or compete in the global market place. Simply put, when the supply of oil peaks, growth stops - not just in the US but all over the world. And whether you like it or not, "Peak Oil" is going to affect every investment you own."
Mr. Saxena operates as a successful international financial advisor and newsletter writer of "Money Matters" (www.PuruSaxena.com). He doesn't believe this correction in oil or the precious metals will last, but he does seem to like theenergy sector (including oil, natural gas, coal and uranium) better.
"The recent pull-back in the energy sector is the final opportunity of buying top-quality companies at reasonable prices. After considerable research, we have identified a handful of holdings, which we feel will appreciate significantly in the years ahead. We firmly believe that the most profitable phase of the energy boom lies ahead, when visionary investors are likely to make huge profits over the next 4-5 years.
Time will tell, but for right now oil and gold have not decoupled. Those who are invested in any related investments, such as Barrick Gold (NYSE:ABX), Yamana Gold (NYSE:AUY) and Sandridge Energy (NYSE:SD) have felt the pain.
Even the big players like BP (NYSE:BP), ExxonMobil (NYSE:XOM) and Valero Energy (NYSE:VLO) have been hit hard. Two other refiners, Tesoro (NYSE:TSO) and Frontier Oil (NYSE:FTO) fell pretty hard, down 5 to 6% in one session.
