Recently we've seen a great divergence in commodity prices. While oil and most other commodities have continued to rise sharply make new all time high, gold along with silver is trading significantly -more than 10%- below their all time highs reached earlier this year.As a result, the gold/oil ratio is down to 7.5, down from 10 in mid-March. What, then, is the cause of this? Will this trend continue?The cause for this divergence is that oil price movements, apart from non-monetary factors, reflect actual inflation while gold price movements mainly reflect movements in inflationary expectations among investors, or to be more precise their demand for gold as an inflation hedge. Actual inflationary pressures remain strong which is the primary reason for why oil has risen so much in price. Meanwhile, gold and silver has taken a beating as demand for them as an inflation hedge has cooled. Instead, many investors have moved their money back into stocks, which can also potentially be an inflation hedge, as inflation also mean that the nominal earnings of companies are inflated.Will this persist? Well, oil will continue to rise, albeit perhaps briefly interrupted by corrections. Gold weakness will perhaps continue for a while because of the current bearish sentiment, but in a few months or so, it will recover. The reason is that while stocks are an inflation hedge, they are not recession hedges. In recessions their earnings decline. Which is what we've seen despite positive currency effects. And once investors again are reminded about that, they will again move their money out of stocks. And at that point, many will choose the investment object that is a hedge against both recessions and inflation, namely gold.