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chrislbecker.com by Chris Becker is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
The petrol price is going up another 93c to R11.97 per litre (inland 95 grade) on September 5, an increase of 8.3%. The petrol price is up from +-R3 per litre in 2002.
This is not owed to higher petrol prices, but a much weaker Rand, caused by the Reserve Bank.
In hard currency terms, the price of petrol is unchanged since 2002. 7/100ths of an ounce of gold could buy you a barrel of crude oil in 2002. 7/100ths of an ounce of gold today still buys you a barrel of oil.
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Hello Chine.
Nice website. Pity about the content. (Joke!)
With regard to your post here… I’ve often seen this comparison made and don’t find it nearly as profound as is made out. In fact, I’d go so far as to say that you have the causation roughly backward. Energy is critical input for all mining activity. Why then wouldn’t you expect gold to exhibit some kind of long-term mean relationship with oil?
You could make the same comparison using a number of commodities and arrive at more-or-less the same result. The point is that energy is a crucial input for all of them and ultimately determines supply prices. See here.
Hey McD, Thats exactly the point of the post: the unchanged long term mean exchange ratio of oil and gold to each other. I am arguing it is the exchange ratio of the rand to both gold and oil that is changing.