Crude Oil and Gold have generally exhibited a positive correlation (meaning they move in tandem) for the past 7 out of 10 years. In general both fall in the commodity asset class and are commonly used by investors as an inflation hedge as well as for portfolio diversification. As inflation increases, both commodities will tend to follow suit.
The correlation sometimes goes negative as it did on June when the 120 day correlation printed -0.1. The current 120 day correlation is @ 0.3 near the years highs. In recent history, correlation has been as high as 0.62 in April 2010, the highest since 1991.
The past couple of weeks, both oil and gold have been correlated and extremely volatile with the current news of OPEC’s decision to not curb production as well as the Swiss vote to not increase the Swiss National Bank’s mandatory gold reserves.
Besides each commodity’s fundamentals, the US dollar strength has been one of the largest culprits of both price declines and volatility. As in gold, oil funded in yen, euro or most other currencies besides the dollar has appreciable outperformed. Perhaps someone smart will start oil ETFs funded in Japanese Yen or the Euro.