Gold screams while oil suffocates
Gold is screaming. Oil is suffocating. This is the Seventy Barrel Anomaly. As of October 23, 2025, one ounce of gold now commands nearly 70 barrels of West Texas Intermediate (WTI) crude. This is not just a statistical outlier; it is a total breakdown of the global energy valuation model. Gold has defied every traditional gravity well to sit at $4,059 per ounce, while WTI struggles to find buyers at $58.20. The math is brutal for anyone holding energy stocks. The risk reward profile has shifted from cyclical recovery to structural decline.
I have tracked commodity cycles for two decades. I have never seen a disconnect this aggressive. In late 2024, the market panicked when the gold to oil ratio hit 35. Today, that figure has doubled. We are witnessing the final decoupling of the world’s primary store of value from its primary industrial fuel. This divergence marks the end of the post-pandemic era and the start of a deep, structural glut. The floor is gone.
The Great Divergence by the Numbers
The hard data from the last 48 hours tells the story of a market in freefall. According to the IEA October 2025 Oil Market Report, global supply hit a record 108 million barrels per day in September. This created a massive 1.9 million barrel per day surplus that the market cannot absorb. Contrast this with gold, which Reuters reported at fresh record highs yesterday morning as central banks flee the dollar. The following table tracks the velocity of this collapse over the last twenty four months.
| Date | Gold Price (USD/oz) | WTI Crude (USD/bbl) | Gold to Oil Ratio |
|---|---|---|---|
| October 2023 | $1,980 | $85.40 | 23.1x |
| October 2024 | $2,730 | $71.20 | 38.3x |
| April 2025 | $3,450 | $65.00 | 53.0x |
| October 23, 2025 | $4,059 | $58.20 | 69.7x |
The Debasement Trade vs the Industrial Glut
Gold is being driven by the debasement trade. Central banks in the Global South are aggressively diversifying away from Western reserve assets. They are treating gold as the only neutral asset left in a fractured geopolitical landscape. This has pushed gold to successive highs despite high real interest rates. Usually, high rates kill gold. In 2025, that rule is dead.
Oil is suffering from a terminal demand problem. The electrification of transport in China has moved faster than any 2024 projection. Recent customs data shows that Chinese crude imports have plateaued. Domestic EV penetration in China hit 60 percent this quarter, per recent Bloomberg market analysis. When the world’s largest marginal buyer stops growing, the price floor vanishes. We are seeing a re-rating of what oil is worth in a world that needs less of it every month.
Technical Breakdown of the Energy Lag
The technical indicators for the major energy ETFs are grim. Both $USO and $DBO are trading well below their 200 day moving averages. I noticed a double top pattern in the energy sector back in August; the breakdown since then has been clinical. While original assumptions for 2025 suggested OPEC+ could defend a $70 floor, the group is now trapped. They are holding back 2 million barrels per day in voluntary cuts, yet global inventories continue to build regardless.
If OPEC+ releases those barrels to reclaim market share from US shale, WTI will likely collapse into the $40 range. If they keep the cuts, they lose revenue and global influence. It is a lose-lose scenario. Gold investors are front running this systemic instability. Gold at $4,000 is a bet on the end of the old financial order. Oil at $58 is a confirmation of industrial stagnation.
The Blind Spot of Missing Data
The current volatility is worse because we are flying blind. The ongoing US government shutdown has halted the weekly CFTC Commitment of Traders reports. Without this data, we cannot see exactly how hedge funds are positioned. However, the price action suggests that speculative long positions in gold are at maximum capacity. Conversely, oil shorts are reaching levels not seen since the 2020 pandemic crash. I am watching the $56 support level on WTI with extreme caution. A breach there would trigger a wave of algorithmic selling. This would likely push the gold to oil ratio toward 80x before the end of the quarter.
Investors looking for a mean reversion play should be careful. A correction would require either a 30 percent drop in gold or a 50 percent rally in oil. Neither is supported by the current geopolitical climate. Instead, we should expect this high ratio environment to persist as the new normal. The next major milestone is the OPEC+ Ministerial Meeting scheduled for January 4, 2026. This will be the moment of truth for the production pause. If the cartel fails to extend cuts, the global surplus will swell to 4 million barrels per day. Watch the $56.50 WTI support level over the next six weeks. If that level breaks before January, the energy sector faces a capitulation event that will define the market for the next decade.
