St. LOUIS () -- The last time, RI the gold to oil ratio, it was hitting multi-year highs above 12 barrels per gold ounce. However, in the last month, the ratio has fluctuated between 11.5 to 10.5 barrels per ounce, with today's gold to oil ratio down at about 10.5 bbl/oz. Some analysts say gold traders are now watching movements in equities closer than oil.
In a morning update, Dennis Gartman, editor of the Gartman Letter, noted that the ratio had fallen after holding above 11 bbl/oz for eight days in a row.
"Those not yet involved might wish to use this weakness to become so, using either the ETFs or gold/crude futures," he said.
The 36-year average is about 17.5 bbl/oz, with last year coming in at 9.2 bbl/oz. Gartman has previously said that he expects the gold to oil ratio to eventually move to 20 bbl/oz.
More recently, he said that when the ratio trades above 12 bbl/oz, "we shall almost certainly add to it."
Crude oil prices jumped 1.3% to $62.55 on Friday after that Iran had seized 15 British naval personnel off the coast of Iraq, triggering concerns over disruptions to crude production in the Middle East.
Gold, however, fell 1% to $657.30 after of stronger-than-expected sales of existing homes boosted the dollar.
Crude futures traded almost 10% higher for the week, while gold gained only about 0.5%.
James Moore, analysts for TheBullionDesk.com, said in a note to subscribers that technical support for gold should again be found in a range of $661 to $656, "while dips should continue to be viewed as buying opportunities short-term."
But Jon Nadler, analyst for Kitco.com said gold's repeated failure to get back over $670 has more and more traders "looking the other way." He said perhaps another visit to the $636-$645 area is in order to bring the buyers out again.
"Gold seems to be having a hard time shaking off the 'guilt-by-association' syndrome with stocks," he said. "Such an unfortunate correlation emerged during the globally synchronized equity market slide in late February."
In the week from Feb. 26 to March 2, the Dow Jones Industrial Average lost 533 points. The yellow metal lost $40.
On Feb. 27, now termed as "Black Tuesday," the Dow fell 416 points after China's Shanghai Stock Exchange lost 9%. Then on March 2, the Dow plummeted 130 points as Japan's yen rallied to nearly a three-month high against the dollar, prompting investors to unwind .
On Friday, the Dow was up 19 points at 12,481, with 13 of its 30 components in the red. Stocks gained 3.1% for the week, but traders continued to show caution before the weekend.
Gartman recommends subscribers to be long of ten units of gold, short of seven units of crude oil and three units of U.S. stocks.
He said four weeks ago, he expanded the trade by buying gold and selling U.S. stocks - one unit of each in equal dollar terms.
Two weeks ago, he reduced long position in gold by half, and then sold stocks against that remaining gold holding.
The Dow/gold ratio is currently 18.8 shares per ounce, up from 18.7 shares per ounce on Thursday, "but moving against us as stocks," he said.
May silver fell 1.9%, or 25.3 cents, to close at $13.227 an ounce for a weekly gain of 1.2 cents. May copper closed down 0.4 cent at $3.069 a pound, up 1.9% from last Friday's close.
June palladium climbed $1.75 to close at $359.50 an ounce, a gain of 2% for the week. April platinum lost $7.60 to close at $1,233.40, up 1% for the week.