Gold & Oil at a Glance

Gold and oil are two of the most influential assets on the planet — but they play very different roles.

Gold is primarily a store of value: it appears in coins, bars, and jewellery, and is widely used as a way to preserve purchasing power over long periods of time. Oil, by contrast, is energy: it keeps planes flying, ships moving, and global supply chains turning.

Gold	Oil
Store of value	Energy source
Safe haven in crises	Industrial commodity
Monetary & reserve asset	Geopolitical tool

 

Despite those differences, wars, inflation shocks, and financial crises tend to pull gold and oil into the same story. Sometimes they move together, reflecting broad stress in the global system. At other times, they move in opposite directions, revealing their very different roles. 

When Oil Companies Tried Mining — and Miners Struck Oil

For most of the modern era, gold miners mined and oil companies drilled. Even so, the 20th century contains a few fascinating experiments where large firms tried to bridge the two worlds.

Oil giants moving into mining

During the commodity booms of the 1970s and 1980s, several petroleum majors tried to reinvent themselves as broad resource conglomerates. Companies like Shell and BP acquired mining businesses, adding base metals and, in some cases, exposure to gold alongside their oil portfolios.

On paper this made sense: these firms were already comfortable with large capital projects, geology, and complex regulation. In practice, mining demanded different expertise and a different culture. Over time, most of these ventures were unwound and the oil companies returned to their core strengths.

Miners discovering oil

The reverse also happened. BHP, for example, began as a mining and steel company before discovering significant offshore oil and gas in the 1960s. For decades it was unusual: a genuine mining-and-oil business under one roof. Other miners, like Freeport-McMoRan, briefly moved into oil and gas during the 2010s to diversify cash flow, only to exit again after the oil price collapsed.

Perhaps the most striking case is Barrick: today known as a major gold miner, it actually started life as an oil company. Early petroleum ventures disappointed, and the business pivoted decisively into gold — a change of course that defined its future.

Takeaway: history shows that combining gold and oil inside a single company is possible, but rarely easy. Different cycles, skill sets, and investor expectations make long-term success in both sectors the exception rather than the rule.
Why Would a Company Want Exposure to Both?

If running gold mines and oil fields is so demanding, why have some firms — and some countries — tried to do both?

Balancing different cycles

Gold and oil rarely peak at the same time. Oil tends to perform best when global growth is strong and energy demand is rising. Gold, on the other hand, tends to shine in periods of inflation, currency stress, or financial instability. Combining the two can, in theory, help smooth earnings across the economic cycle.

Shared skills and subsurface data

Both industries depend on geology, engineering, and the ability to operate in remote regions. An oil company may already have extensive seismic data, infrastructure, and local relationships that can be useful when exploring for metals. Likewise, a mining firm might see opportunities in nearby hydrocarbon basins.

National strategy and resilience

At the national level, the logic is even clearer. Oil supports energy security and export revenues. Gold strengthens financial reserves and confidence in a country’s balance sheet. Many resource-rich nations now pursue both, diversifying away from reliance on a single commodity.

How Gold and Oil Move Through the Global Economy

Even when corporations remain specialised, the prices of gold and oil are often linked through broader economic forces.

Oil feeds inflation, gold responds to it

When oil becomes expensive, it raises the cost of shipping, food, and manufactured goods. That pressure works its way into consumer prices, pushing inflation higher. Because gold is widely regarded as a hedge against inflation, investors often turn to it when they expect their currency to lose purchasing power.

This pattern was on full display during the 1970s, when energy crises and oil embargoes drove fuel prices sharply higher. As inflation took hold, gold broke out of its old fixed-price regime and surged to then-record highs.

In crises, gold often rises while oil falls

In deep recessions or financial shocks, people travel less, factories slow down, and demand for oil drops. At the same time, concerns about banks, currencies, or government debt can lead savers to seek refuge in gold.

That divergence was evident during the 2008 financial crisis and again during the 2020 pandemic: oil prices collapsed with the real economy, while gold proved resilient as a defensive asset.

Energy costs and gold mining

There is also a more direct connection. Energy is a major operating cost for gold miners, from running haul trucks to powering mills. When oil prices fall, some higher-cost mines remain viable for longer. When oil prices rise sharply, margins can be squeezed, particularly at older or more remote operations.

What Does All of This Mean for Investors?

For someone thinking about long-term savings rather than corporate strategy, the key point is that gold and oil play very different roles.

Oil reflects the health of the real economy — it tends to do well when growth is strong.
Gold reflects confidence in money and institutions — it tends to do well when that confidence is questioned.
Together, they help tell the story of where we are in the economic cycle.

For many investors, gold functions as a form of financial insurance: a way to diversify a portfolio that might otherwise be dominated by shares, property, or bonds. Understanding how oil prices interact with inflation, growth, and central bank policy provides useful context for that role.

Continuing Your Learning Journey

Gold and oil will remain central to the global economy for years to come, even as technology and the energy transition change how we use them. For individuals, the most important step is education: understanding what each asset can and cannot do.

The Wessex Mint Academy is designed to help you build that understanding — from the basics of spot prices and premiums to the wider forces that shape commodities markets.