Baltimore — (TFN): I stuck to my word and bought gold. If you follow the markets long enough, you earn a full grasp of the psychology behind it all. After a while, you notice the tiny quivers and false starts that signify a move in either direction.

I used this insight and logic to warn investors about an imminent downturn in gold prices earlier this month. I got a lot of “feedback” from disappointed gold bugs. But it didn’t take long for them to eat their words as the price of an ounce of gold fell by nearly 10% in the last month.

What you’re looking at below is a chart of the gold-to-oil ratio. The gold-to-oil ratio is exactly what it sounds like. You simply take the spot price for an ounce of gold — around $900 per ounce as of this writing — and divide it by the price of a barrel of oil.

With all the sniping and arguing in the media lately… you might be a bit confused as to whether oil or gold is the best hedge in the current climate. The answer’s quite simple… let me explain…