At the moment the Gold/oil ratio is at a frugal one oz. gold for every 6.5 barrels of oil. It's clearly obvious that the ratio between the two commodities are at their nadir. More evidence that future moves in the price of PMs will be substantially to the upside which only translates into good news for ECU and the mining sector as a whole.

Portfolios invested accordingly will prosper exponentially in the coming weeks/months as this ratio starts its ascent. With the ratio at less than half the traditional purchasing power of 15:1, the opportunity is extremely ripe to make money.

Below is a snippet from an article by Brian Hunt suggesting we could witness a $200 jump in the value of gold in one day.....phenomenal.

BD1

Because gold and oil respond similarly to inflationary pressures, the two tend to trade in a predictable range.

Over the past 25 years, one ounce of gold has bought, on average, 15 barrels of oil. When an ounce of gold can buy 20 barrels of oil, it's expensive and due for a fall. When an ounce of gold can buy less than eight barrels of oil, it's cheap and due for a rise.

Right now, gold buys you just 6.5 barrels of oil – less than half its traditional purchasing power. The tremendous rise in crude oil prices is the cause of this situation. Crude has gained 155% in the last 18 months. Gold has gained "just" 50% in the same time. As you can see from the chart below, this disparity has left the rubber band pulled extremely tight.

There's no guarantee this extreme will work itself out quickly. But this is one trade worth keeping on the radar. If oil stubbornly refuses to correct from its levels above $140, gold could easily pop to $1,000 and beyond in just a few days. In 2005, a similar extreme reading preceded gold's rise from the mid-$400s to the mid-$600s.

If you haven't bought gold as "catastrophe insurance," now is a great time to do so. If more cockroaches crawl out of the mortgage debacle and into mainstream headlines, you'll likely get a $100-$200 per ounce jump in your investment. Whether it's through buying bullion, gold stocks, or an ETF, right now is an extreme opportunity in gold.

http://www.kitco.com/ind/B_Hunt/jul0...