To say that gold and oil prices are linked would be a nonsense if we were to take these two commodities as such. However, and we see this in a very tense geopolitical and energy context, gold and oil prices seem to be closely linked. They both follow the inflation curve in the strictest sense of the market value attributed to them.

Gold a safe haven that does not waver in times of crisis

In the particularly tense context of the war in Ukraine, soaring energy prices have a direct impact on households and businesses. Blackmail over oil supplies is naturally pushing up the price of a barrel of crude.

Anything that is scarce is expensive. The member countries of the Organisation of Petroleum Exporting Countries, of which Russia is a member, set the price of a barrel of oil themselves according to market supply and demand. In the current geopolitical context, the price of a barrel of oil is particularly volatile. In order to stabilise their finances, oil-producing companies are selling part of their gold reserves.

The direct role of inflation on gold prices

The approach of large companies, including oil-producing ones, is the same as that of savers. Gold is also, for these multinationals, a safe haven that has never been questioned.
Tensions on the oil market naturally generate inflation which, by mechanical effect, will directly influence the safe havens most prized by investors. However, gold has always been considered as the safe haven par excellence.

On the other hand, and more globally, the general instability of the commodity markets has mechanically caused the price of gold to soar. Since the beginning of the year, the ounce of gold has risen by almost 20%. In view of the particularly tense geopolitical context and the galloping inflation on a global level, it is likely that the price of gold and oil will continue to rise.