The Gloss is off… Precious metals have fallen since January when Gold peaked at $5,318.00 a troy ounce. The past 7 sessions declines have been alarming, accelerating to lows near $4,300.00 an ounce. Last Thursday gold dropped 5.9%, while silver slid 8.2% a troy ounce, with both hitting new lows. Presently Gold is steady at $4,457.50 a troy ounce while Silver is $70.10. Platinum has fared far worse, now down to $1,857.50 a troy ounce. Investors and traders have ‘brushed aside’ (for now) the safe-haven aspect of precious metals. Pressing fears of global interest rate cuts, the Middle East War and skyrocketing oil have seen many investors pivot into steady interest paying bonds. Another week of losses, the fourth in a row, nudged lower by comments by the Pentagon that the “U.S. is sending three more warships and additional marine forces into the region” gave investors and traders more worries. Brent Crude jumped, hitting $112.19 a barrel, adding to investor consternation of the impact on the economy, specifically consumer prices. Hopes of an “early resolution” to end the war appear to have faded. The week closed Friday with the Dow Jones Industrial Average losing 450 points. The steady-eddy S&P 500 is 5% lower in 2026, after the previous two years of more than a 10% gain in each year.
President Trump opened Monday’s market (with a 7am post on social media) that a postponement of air-strikes on Iranian power plants would take effect at once. He said in part “productive conversations regarding a complete and total resolution of our hostilities.” Immediately the markets “surged,” with a dark day turning bright. Oil weakened from a high of $112 a barrel dropping to $100 a barrel. “A little bit of light, or a little bit of good news, can go a long way,” said Keith Lerner, chief investment officer at Truist Advisory Services. He added, “Before this weekend a lot of people were thinking about worst case scenarios.” By day’s end the indexes were up with the Dow Jones Industrial Average, after a flat opening ran up 1.4%. The S&P 500, after dropping significantly at early opening, charged back after Trump’s comment to finish the day up 1.1%. Michael Lorizio, head of U.S. rates and mortgage trading at Manulife Investment Management, quotes: “There was a lot that changed in a pretty unprecedented manner right at that time.” (Referring to reactions from President Trump’s comments early Monday)
Tuesday was a ‘hopeful day’ as the U.S. submitted a 15 point proposal to initiate the first step to settle the Middle East War. That sent stocks into positive territory as oil simmered, with West Texas crude resting at $93.35 a barrel while Brent crude hovered near $100 a barrel. “The longer oil stays higher, it’s almost like a governor on the economy,” said David Lundgren, a portfolio manager at Little Harbor Advisors. “All I care about is what the health of the equity market is to endure this shock. The health is not good.” The Russell 2000, made up of smaller value oriented companies, was active as investors looked to position back to bread & butter value companies. Technology, Artificial Intelligence and software issues were sluggish at finish, the Dow Jones had fallen 84 points to 46124.06, while the Nasdaq Composite off 0.8%. The S&P 500 slid 0.4%. Another rough day for the market Thursday as the indexes endured punishing corrections. The Dow Jones Industrial Average slid 469 points, while the Nasdaq Composite entered “correction territory,” and the S&P 500 dropped 1.7%. Oil, the driver of the market, “surged past $100.00 a barrel.” The fragility of the market is weighing on investors, as gaining a footing eludes them.
RUMBLINGS ON THE STREET
Bob Elliott, CEO of United Funds, WSJ – “The oil shock has dashed hopes across the developed world that persistent elevated inflation would resolve itself even with easy policy.”
David Miller, chief investment officer at Catalyst funds, WSJ – “Are we likely to be in a bit of a funk for a little while? Yes, I think so.” He added that he doesn’t think the declines are likely to be as bad as those suffered when rates climbed in 2022.
Bernard Baumohl of the Economic Outlook Group, WSJ – “Given the outgoing war in the Middle East, surging oil prices, high tariffs, AI and the severe constraints on immigration, it is worthwhile noting how resilient the U.S. economy has been so far. But we must not take this resilience for granted.”
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