| Zone | GOR Range | Risk Signal | Action |
|---|---|---|---|
| EXTREME | ≥ 45 | Oil deeply undervalued vs gold | Accumulate energy. Reduce gold. |
| RECOVERY | 30–45 | Ratio normalizing. Crisis abating. | Hold. Let the trade work. |
| FAIR VALUE | 20–30 | Historical equilibrium. | Light positions. Wait. |
| OIL BUBBLE | < 20 | Gold cheap. Oil expensive. | Cash + gold. No energy. |
| Condition | Correction | Logic |
|---|---|---|
| DXY > 99 | -10% | Strong USD suppresses commodities |
| DXY < 98 | +10% | Weak USD supports risk assets |
| 10Y > 4.3% | -10% | High rates raise carrying costs |
| 10Y < 4.2% | +10% | Low rates support allocation |
| PBoC buying ≥2T/month | Gold floor | Central bank bid = the floor |
| # | Rule |
|---|---|
| 1 | WTI < dynamic SMA×0.85 with demand shock → oil forced ≤ 5% |
| 2 | No leverage — lifetime rule |
| 3 | No shorting — the framework does not short |
| 4 | Single asset ≤ 25% of portfolio |
| 5 | Cash ≥ 40% during risk calendar windows |
| 6 | Build positions in ≥3 tranches, never all at once |
| 7 | Gold base ≥ 15% while PBoC keeps buying |
| Period | GOR Peak | Duration | Reversion Path |
|---|---|---|---|
| 2020.04 | 60+ | 12 months | Oil rebound + gold sideways |
| 2016.01 | 40+ | 18 months | Slow oil grind |
| 2008.12 | 30+ | 24 months | Post-crisis oil recovery |
| 1998.12 | 28+ | 36 months | Post-Asian-crisis recovery |
Pattern: GOR reversion direction is certain (oil rises or gold falls or both). Timing is not (12-36 months).