Abstract
<jats:p>This study presents a comprehensive macroeconomic analysis of the gold-to-oil price ratio dynamics over a century-long period (1924-2024) as an indicator of global economic transformations. The research relevance is driven by increasing volatility in global commodity markets, particularly following the Great recession and COVID-19 pandemic, highlighting the need for reliable tools to detect systemic risks and forecast macroeconomic dynamics. The methodological framework employs retrospective and descriptive statistical analysis of historical data using spot prices for gold (London Market Price) and oil (U.S. Crude Oil First Purchase Price for 1924-1945, Brent Spot Price for 1946-2024). Based on the analysis, five major historical stages in the price ratio dynamics are identified. The first stage (1924-1933) was characterized by the truncated gold standard with extreme volatility, reaching 31.80:1 in 1931 during the Great Depression. The second stage (1934-1971) corresponded to the Bretton Woods system with relative stability in the 11-18:1 range. The third stage (1972-1985) was marked by the system’s collapse and oil shocks, causing extreme volatility. The fourth stage (1986-2007) showed stabilization within 10-30:1 range during globalization. The fifth stage (2008-2024) represents a new volatility era with extreme fluctuations from 14.81:1 to 93.4:1. Special attention is devoted to extreme ratio values in the contemporary period. During COVID-19, the ratio reached a record 93.4:1 in April 2020 due to oil price collapse to negative values. The minimum value of 14.81:1 was recorded in June 2022 following the "oil shock" caused by russia’s aggression against Ukraine. The research demonstrates that the gold-to-oil ratio functions as an effective "economic thermometer" and "barometer" of global economic health, integrating information about economic cycles, inflationary expectations, geopolitical risks, and investor sentiment. Historical analysis confirms that significant deviations from the historical "norm," when the ratio exceeds 30:1, often preceded economic downturns and recessions. Simultaneously, periods with ratios below 10:1 are characterized by declining oil investment profitability. Key determinants of price ratio dynamics are identified: business activity fluctuations, geopolitical risks and disruptions, central bank monetary policy, and structural factors including the energy transition to renewable sources and the U.S. shale revolution. The study shows that gold’s liberation from fixed parity in 1971 and massive financial capital penetration into commodity derivatives markets enabled the ratio to respond more sensitively to market signals, resulting in significantly increased volatility and analytical potential. Based on literature analysis and empirical data, the prognostic potential of the ratio as a leading indicator of economic downturns and changes in market risk structure is substantiated. The research findings have important practical significance for macroeconomic policy formulation, investment decision-making, and systemic risk assessment. The ratio can serve as an additional tool for monitoring economic stability and developing portfolio diversification strategies. However, limitations of this indicator are identified, particularly its often lagging nature, interpretation complexity under conditions of nonlinear and asymmetric relationships between asset prices, and the absence of convincing evidence for long-term causal relationships between gold and oil prices in some studies. The authors emphasize that the ratio should be used as part of a comprehensive analytical approach rather than as a sole forecasting instrument.</jats:p>