It was another volatile day in the gold and silver markets, as you may well have expected given the events that escalated over the weekend in Iran and Israel.
The gold futures are currently at $5,013, and you can see how there was a lot of volatility, but the price basically ended up where it started on the Sunday night open.
The silver futures are actually a touch higher than where they opened on Sunday night, and are currently trading at $81.10, after dropping as low as $77.20.
Obviously, the big focus of the day was the Iran war, the oil market, the Strait of Hormuz, and all the implications that come along with that, as I would assert that we’re in a much more fragile predicament than many market participants are fully grasping.
This sure seems like one of those times on the planet where the way things progress from here could not only have significant implications, but potentially incredibly harmful ones. And part of the reason why this column is a little bit later than normal is that in addition to having to do a little traveling today, I also spent most of the day working on a video that recaps some of the stunning events that happened over the weekend (that I don’t think many are fully aware of just yet), and why the resolution, or lack thereof, will be so critical to both the economy and the planet.
In Bloomberg’s precious metals recap, they talked about the complications from the surging energy prices, and also how we’re on track for a Fed meeting later this week as well.
Uncertainty over how long the war will last makes it difficult to assess the impacts on markets and the wider economy. An aide to US President Donald Trump said the conflict could last four to six weeks, while both sides have given mixed signals.
Trump said Iran wants to make a deal but that Washington wants better terms, while Tehran said it hasn’t asked for talks or a ceasefire.
As I detailed more extensively in the video posted above, I’m not so sure I agree with that last part about Iran being in a rush to make a deal at this point. It seems to me that they understand full well the leverage they hold, with much of it coming via the damage that’s been done economically, with the possibility of more, perhaps to a devastating degree.
Again, I’d really recommend watching that video, as we’re currently in a situation in which the clock is ticking loudly, and the consequences could very quickly get quite asymmetric in an incredibly negative way.
The situation is severe enough that Trump has already lifted some of the sanctions that were placed on Russia when they went into Ukraine back in 2022, and has even called on China to help try and get the Strait of Hormuz open again.
This is also indicative of how I think the Trump administration realizes just how fragile the current predicament is, and hopefully a sign that they realize that even if they pummeled Iran, but Iran essentially hits their dead man’s switch, that we would all end up in a situation which would be devastating both economically and socially, and just about in every other way possible as well.
Obviously, I know gold and silver investors are still a bit frustrated about the lack of reaction in the precious metals prices. Although keep in mind that gold went from $1,000 to $700 in 2008 as the markets were unraveling, before hitting $1,900 a few years later. And I think we’re in a similar situation now that has a lot more to do with liquidity than the actual value of gold and silver.
When that phase will end, I’m not entirely sure. Although I maintain my belief that as tragic as the current political wartime events are, in the grander scheme of things, the gold and silver prices are going to do what they’re going to do, regardless of whether the war ends tomorrow, or five or ten years from now.
I’m going to wrap up here for now, but I do hope you get a chance to see that video, because I think it will put a lot in context. And in either case, I’ll look forward to checking back in with you again.
Sincerely,
Chris Marcus
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