The David Lin Report · Thursday, July 16, 2026
Kai Hoffmann explained that the recent surge in oil prices, contrasted with gold's decline, is due to different fundamental drivers. Oil prices are influenced by supply shocks and Middle East disruptions, while gold is reacting to inflation and rate hike fears. He noted that while oil should be higher given disruptions, an oversupply entering the crisis has kept prices in check.
“In the past, when the gold oil ratio has spiked, meaning gold has risen faster than oil or gold has risen and oil not at all. That usually coincides with some sort of economic contraction or in some cases have led a market pullback or outright recession. Makes sense when people flock to safety. And something cyclical like gold like oil goes down. Now, the reverse has happened. In the last couple months, oil has skyrocketed while gold has continued to come down ever since the breakout of the Iran war. You would think the inverse would signal economic growth. Is that what that is?”
“No. Uh, no, because it's a supply shock that caused oil. Exactly. So the fundamentals are vastly different. So gold had a massive run up into the March crisis. Sure. Right. It it ran to 5600 and then it was a massive source of liquidity. Traders, investors were sitting on massive gains. Inflation fears, rate hike fears pushed gold lower. Oil on the other hand, like it was as you said, it was a supply side driven. And different different fundamentals were pushing it.”