Take physic, pomp

One ounce of gold = twenty barrels of oil

This is the three year chart of the Gold/Oil Ratio (“oil” defined here as light sweet crude):
Does this mean cash costs for precious metals producers might just start going down? When the chatter on that subject started a few weeks ago I was sceptical, but on the latest move I’m going to have to join the throng and say yes, there’s every reason to expect average costs to drop for production of heavy things you count in ounces or pounds. The effects won’t be immediate, but by the end of 2012 we should see costs dropping.

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