Price of Gold / Oil / Stock market

[mugsisme]

OK, so I am totally new to all of these. In the last year I've been paying attention to the price of gold, since I've been scraping. However, as you know, I've been watching it fall and fall and fall. Lately, gas has been very low. I know that when the stock market does well, gold goes down. Does oil have anything to do with it as well?

 

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[Mackaydon]

IMO,the price of oil has little to do with the stock market; supply and demand are the drivers. Today, there is a glut of oil--and its price reflects that. If Iran starts dumping their oil, the price of oil will go down further.
Don........

 

[TheCoinKid]

The relationship between oil and the stock market is a complicated one.

Generally speaking, a robust economy is good for both oil and stock prices. Expansion leads to more demand for oil. Here you see oil/stock price correlation.

Certain market sectors benefit from higher oil prices (oil producers, refiners, drilling companies, oilfield service companies, etc.). Other sectors benefit from lower oil prices (airlines, trucking companies, any industry that needs to move people or goods).

Bottom line, it's all about supply and demand. The flow of oil from the Middle East is so great, that a major producer opening or closing their valves, so to speak, make the other factors seem insignificant.

Regarding gold, it has long been considered a hedge against inflation and a flight to safety investment, both having an inverse relationship with stock prices. Gold is also used in manufacturing processes, thus can benefit from expansion, just as stock prices do.

Gold and oil prices vs stock prices? Just depends on which market factors are in play at any point in time. To me, investing in oil or gold is pretty much a pig in a poke.

TCK