CL vs. Gold and NG

R

runningman

So the historical relationship between gold and crude oil is that an ounce of gold will usually buy about 15 barrels of oil. Using this math right now, it gives us a price of about $43 per barrel. A barrel of oil is about 5.8 Million BTUs or should be about 5.8x the price of NG approx. 5.8*NG right now gives us about a $41 barrel of oil. These spreads seem at very stretched levels. What are your thoughts on this spread coming in in the next 6 months? What would your opinion on a long gold, short 2 oil, long NG trade right now to play the spread coming in?
 
here is an old article on the gold - oil relationship

www.zealllc.com/2005/gorex3.htm

you might just want to try the crude - nat gas spread

but using QM and QG ( mini contracts )

and adjust accordingly

just be careful

as the history books are littered with traders and the spreads that crushed them

good luck

ps I think the CL - NG spread was even wider late last yr
 
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