I’ve been watching the crude tape closely this week and something does not add up at all.
Trump declared total victory on Iran, the market sold off the war premium in crude, everyone moved on. But Hormuz is not actually fully open. There are still idle tankers, freight costs are not normal, and Iranian barrels aren’t back on the forward curve yet. The physical market and the political narrative are in two completely different places atm.
The thing that’s bugging me the most is gold. If this was genuine resolution, gold should be selling off too but instead its holding above $3200 while crude falls. Imo that’s not a risk-off unwind, that's institutional money saying ‘we don't fully believe this’ while selling the obvious war premium trade.
So either crude catches up the golden age narrative and rips, or gold is right and crude has more downside. The tape is pointing at the second one but I've been wrong before.
Anyone else watching this divergence or am I just overcomplicating it?
Iran "ceasefire" is being priced as solved. It actually isn't
byu/InfinitePressure4793 ininvesting
Posted by InfinitePressure4793
4 Comments
You could just look at the news and see you’re correct lol
I suggest gold and oil are not as linked as you think. I suggest gold has different variables that affect its price. example: gold was falling before trump bombed iran. Why that happened has a few drivers and I dont know all. I do know that gold first started to drop when trump announced his new Fed chair nominee.
Wait till Monday, it’s going to be a bloodbath this week for the markets. The Iran war is just getting started and will push the US into a recession.
You’re wrong about gold. Gold was driven up by foreign reserve purchasing; when oil spiked oil dependent countries were forced to sell/stop purchasing. So if the Iran situation resolved you’d actually expect gold to return closer than ATH, not sell off.