We started with last September, when the number was about 9 barrels per ounce. Beginning in January, the number soared, as the price of gold climbed and oil fell. By February 6, the number of barrels of oil that you could fetch with an ounce of gold had risen to 10.35.

The change since then has been remarkable, and it strongly undercuts the idea that the rise in the price of oil is simply a financial phenomenon. If gold is the ultimate storehouse of value and the currency of last resort, a commodity that is being driven primarily by currency factors should not be strengthening against that currency.

But as of last Friday, an ounce of gold could only buy 7.44 barrels of WTI, a strengthening of more than 23% since the February 6 alternate peak. The purchasing power of an ounce of gold has strengthened by almost one full barrel just since April 11.

With the gains in oil in Euro terms, and in gold terms; the fact that diesel has outperformed crude; and now with with the recent declines in production that we wrote about in this post , the case for fundamentals being in the drivers seat in this market is looking stronger every day.

But Platts' LInda Rafield reports that these sort of levels are far below historic norms, meaning either that crude is going to come off or gold is going to rise to get back toward those norms. Just since September, that average ratio is 8.97, and if gold were to hold at current levels, oil would need to fall to about $100.50/b to reach that level.