The fact that the ratio of gold prices to oil prices is now well below its long-run average is often used to argue that gold must be significantly under-valued. We disagree, for three reasons.

Developments in the dollar are likely to dominate oil price movements in the short-term and could even drag Brent crude as high as $125 per barrel (pb) this quarter. Nevertheless, with a recovery of...

This week’s sharp falls (from a peak of $1030 to a trough of $905) have reinforced our scepticism about the medium-term outlook for gold prices. We have therefore trimmed our end-2008 forecast from...