By and large, I don’t think I’d be without peers when I said the biggest thing that happened this week was on energy markets.
Once again, the Gaza conflict – or genocide, which it’s getting pretty hard to avoid using as a descriptor at this point (for anyone of sound mind) – has led to a spike in oil prices, both WTI and Brent.
In fact, Brent jumped up by as much as 10% at one point on Friday trades Australia time, which is the biggest daily increase this finance journalist can remember. I used to write for an oil and gas magazine, and the spike we saw on Friday was fair to call ‘insane.’
Perhaps that’s why gains pared off.
But at any rate, it’s true Iran is a major oil producer. However, as I’ve written many times before, the 1970’s Oil Crisis remains firmly embedded in the market’s collective mind.
That’s neither here nor there, but since those heady years, global oil supply dynamics have changed.
The US is now a major hydrocarbon producer and exporter, and it’s not immediately apparent that disruptions to Iranian supply would actually cripple the US in any real way.
Still, if you’re raking it in on oil options, you don’t care about that. So the price continues to react to Middle Eastern conflicts.
So what was the other big news?
United States’ inflationary data – both CPI and PPI.
In short, growth in both departments was only +0.1% for each category.
What the market made of that?: tariff inflationary impacts aren’t here yet. What could be of more concern is that the US jobs market appears to be slowing down, based on what numbers we’ve got right now.
(It’s also an unfortunate reality that some corners of the internet are wondering how reliable US economic data is right now, what with Trump’s move to install loyalists across all branches of government. But we’re probably not in territory yet when tin foil becomes accepted.)
At any rate, with jobs slowing and inflation coming in soft, for now, that points towards more cuts from the Fed.
The other big thing that grabbed my eye this week was in commodities.
I’m going to admit, here, I’m skipping over the ASX this week but you can hear more about local affairs in this week’s HotCopper Podcast.
Silver’s having a moment
While Friday’s geopolitical chaos saw gold prices popping again (and that of oil,) it’s a commodity that tracks gold which has been catching my eye.
And that’s silver.
The sister to gold, silver prices have popped +12% this month and year to date they’re actually outperforming gold, as the latter’s historic price run finally seems to have petered out at a new floor.
And that’s causing some to rotate into silver, a metal which tracks the price of gold but potentially has further room to run.
A surprise to nobody, you can expect to continue hearing about silver on the ASX, particularly from junior miners, for as long as that trend continues. Success, so far, has been mixed – but the same rules as ever apply.
Shallow high grades are king. Until next week!
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