What will happen with gold prices when oil reserves dry out?

Since gold is so dependant on oil prices, will gold prices go up or down once energy is not dependant upon oil reserves?What will happen with gold prices when oil reserves dry out?
Gold is generally a hedge against inflation and uncertain times. Oil prices have been inflationary and the area of the world where most of the oil reserves are located has often been politically unstable.





The inflationary pressures would ease some but the political instability will still remain. Other world issues might take up the slack in the ';uncertain times'; category and assuming the replacement source for energy is going to be readily available to everyone I would guess gold prices would come down some.What will happen with gold prices when oil reserves dry out?
GOLD WAS VALUABLE BEFORE OIL AND WILL BE WHEN OIL HAS BEEN LONG FORGOTTEN.


LONG RULE GOLD...!!
My guess is it would go up, thats if you beleave oil will dry up.


I personally think oil is a natural substance of the earth, like water.
Gold, like oil is finite. I suspect that when all of the oil has been recovered, gold won't be far behind in that regard.





But, the business of predicting isn't an easy one. Many unforeseen and random factors can have an influence on any prediction. The global community depends heavily upon oil for virtually everything -- including food. The first thing that will happen when the oil begins to run out is that many will starve to death. The global population will drastically shrink. One of the unspoken facets regarding capitalism, is that capitalism requires constant economic growth to succeed. Economic growth requires a growing population. This suggests that the end of oil will usher in a massive decline in population. The population decline will usher in a massive depression. Massive depression will usher in social revolution.





So the conclusion is, who the hell knows? The law of supply and demand suggests that as gold supply declines, prices should go up. On the other hand, the decline in oil will usher a global depression suggesting a decline in the price of gold. Social revolution could make this entire thought experiment a moot point.
This is a good question.


Actually, you are quite right, the price of gold is, in part, dependendent upon the price of crude, but also upon currency rates, proven reserves, world political situation, etc.


If a huge discovery would be unveiled, then the price of gold would drop. The same would happen if IMF would (as they say they would) start selling at least part of their bullion.





The price of crude is reflected in the price of gold (and other metals) because of the physical production process - i.e. taking big rocks and breaking them into very small rocks. Most machines used in mining operations are diesel-powered, and thus consuming huge quantities of diesel fuel.





However, electricity can be used in the future to accomplish the same goal. It just depends.





Also, keep in mind that it is unlikely that the world's oil supplies will dry out during our lifetimes. There is, still, a lot of oil in the world. Venezuela sits on oil reserves bigger than Saudi Arabia. The problem is, the oil is heavy, sulfurized, and difficult to transport. But if the price climbs high enough, these deposits become economically viable.





The same happened with Canada's tar sands. With oil at $18/barrel (yes, Virginia, it is true..) it was uneconomical to exploit this resource. With oil at $60 / barrel, the enterprise makes around $20 profit per barrel.





And let's not mention the natural gas reserves...





Currency valuations are also important since both the price of crude and the price of gold are denominated, mostly, in USDollars. As the Treasury is devaluing the USD more and more (in order to pay for wars - higher taxation is highly unpallatable), the price of all commodities increase as to reflect their true value.





So, you see, gold is a reflection of the value of oil and oil is a reflection of the value of energy.





It is a very complex situation. I wrote a neural network program that could predict the price of gold one or two days in the future, based upon very large amounts of data, Beyond that, the prediction breaks down very fast.





In a nutshell, it is difficult to give a concrete answer. It is a complex question, and complex questions have complex answers.
It will take at least 300 years for oil to deplete.


Anything can happen in such a long time-frame.





While logic says scarce oil will mean high prices for gold due to inflation, it also may be an scenario with such an economic depression (not just recession), that all commodities -including gold- will sell lower because nobody can afford them at any price, as happened in 1929.





It is also possible that gold producing countires improve their technologies in 300 years, and new supplies are found, therefore a lower price. Be aware that gold is cheaper now, relative to average incomes, than it was 100 or 300 years ago, when only kings could afford them.