The gold and silver prices are relatively flat on the day, as the world was sitting there waiting to see what happens tomorrow, with US President Donald Trump’s latest imposed deadline to wipe Iran off the face of the earth.
After what we’ve seen regarding the headlines over the past few weeks, I’m not sure how you can take anything that comes out right now without multiple grains of salt. But for whatever it’s worth, here are some of the headlines currently being distributed, which in many cases are in direct contradiction with each other.
CNBC talks about the possibility of a cease-fire.
Although in another article, they mention that neither country has actually backed the ceasefire, of which that part seems a lot easier to believe.
‘The United States and Iran on Monday were weighing the framework of a plan to end their five-week-old conflict, even as Tehran pushed back against pressure to swiftly reopen the Strait of Hormuz on the eve of a new ultimatum set by President Donald Trump.
Trump has threatened to rain “hell” on Tehran if it did not make a deal by the end of Tuesday that would allow traffic to start moving again through the vital route for global energy supplies.’
As I continue to research this situation, I find that the Iranian response to Trump’s threats is not one of backing down. So thoughts on which country is right or not aside, I’m not sure that I feel good about the latest headlines indicating we’re on track towards a deal before the U.S. conceivably destroys parts of a country, kills and disrupts life for a large number of people, and Iran responds by taking action that will create great economic hurdles for the rest of the world, and exacerbate some already disconcerting energy and supply shortages, that could lead to food and water crises.
Further complicating things is that in several of the previous negotiation attempts, the Iranian negotiators have been killed. Which, aside from whether you think they are right or not, I do believe has left Iran feeling very untrusting of the Western leaders at this point.
So far the benchmark oil prices have remained in check.
Although reports of looming shortages continue to emerge.
We’ve also seen the West Texas/Brent crude spread invert, which speaks to the breakage of the system that’s beginning to occur now.
WTI crude spiked to $111.29 per barrel on Thursday, with Brent trading at $107.57, inverting the global benchmark structure as the market repriced accessible supply amid a prolonged disruption at the Strait of Hormuz.
WTI rarely trades at a premium to Brent. Brent crude reflects seaborne crude and typically leads during global supply shocks, while WTI crude is usually discounted. The current inversion points to a breakdown in normal pricing signals tied to physical flows.
Part of the move is technical: WTI’s front-month contract reflects May delivery, while Brent has already rolled to June, skewing the headline spread. But the deeper driver is extreme prompt pressure—WTI backwardation has surged to record levels—signaling immediate demand for secure, deliverable barrels. With rising uncertainty around global shipping routes, WTI has effectively gained a “security premium,” narrowing and even reversing its usual discount to Brent.
We’re also seeing indications of problems far more serious than just higher gas prices.
Keep in mind, this is just a snippet of what’s happening now, before further action is conceivably taken by either or both sides. Given that, if both sides do go through with an escalation, the rest of anyone who’s still alive by Wednesday will likely be dealing with the death or life devastation of some ungodly number of people, while even those not directly affected by the bombing end up struggling under the cost of what will be a new level of economic disaster in our lifetime, and possibly even several humanitarian crises.
So to say that it would be a really good outcome for the world if this doesn’t escalate any further would be an understatement. Sadly however, I feel like I’m praying for a miracle right now, and just continue to hope that my belief of where this is headed is incorrect.
Jamie Dimon of J.P. Morgan posted his annual letter today, and for those who need a bulge-bracket investment bank to put their stamp that there’s a legitimate problem, here’s what Dimon had to say:
“The outcome of current geopolitical events may very well be the defining factor in how the future global economic order unfolds,” he said. “Then again, it may not.”
He also cited a “realignment of economic relations in the world” brought on by U.S. trade policy. U.S. President Donald Trump has made tariffs a signature policy of his second term in office, introducing higher duties on dozens of trade partners and import categories.
“The trade battles are clearly not over, and it should be expected that many nations are analyzing how and with whom they should create trade arrangements,” Dimon said. “While some of this is necessary for national security and resiliency, which are paramount, it is hard to figure out what the long-term effects will be.”
Speaking of those hard-to-figure-out long-term effects, it looks like there are some serious consequences that we won’t even have to wait that long to find out about.
Then there’s the cost of the whole matter, which, according to Trump, is going to necessitate a 50% increase in military spending.
The situation is now extreme enough that even Jerome Powell is acknowledging he’s concerned about the debt.
I suppose we could probably go on here for a while, although I’m guessing you get the greater point.
However, if you did want some more color and analysis of what’s happening right now, especially in the oil market, and how that will affect the gold and silver markets, where it’s not inconceivable we could have another round of selling pressure, we did talk about that on our YouTube channel today.
So it’s a pretty important moment in time for the world. I truly hope that the good in humanity will somehow be able to prevail, because if I may be so bold as to say so, regardless of who has killed whom in the past, in any of the horrific situations that have taken place, it really would be a travesty if we’re sitting here in a few days trying to comprehend the life and economic damage that’s just been done.
If that should occur, I get the feeling that we could see more selling pressure on the precious metals, as just about everything gets liquidated. My further guess is also that if it does occur, that would probably create something similar to how silver went down to $12 when COVID broke out, and then surged past the $20 level for the first time in years just a few months later. Although if this situation does further escalate, there’s some sense in which I don’t really know how important the gold and silver prices will really be at that point.
So in either case, I just hope you are safe and well wherever you are, and I’ll look forward to reporting back on the latest tomorrow.
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