What happens to gold in an oil crisis? It goes up. A lot. When the first crisis hit back in 1973 in the wake of the Arab-Israeli war, nothing happened immediately. But then as the impact of the embargo began to be felt in the US and in particular as oil began to be rationed that changed.
The price of gold doubled in less than four months from $85 an ounce to $180, with the peak coming just as the embargo ended. The price then eased slightly. But as GMP Securities point out, the end result was that it stabilised in a much higher range $130-$150 than it had previously held.
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