Geopolitics

The fragile balance in the Ukraine war has broken – the conflict can escalate and take investors who are focused on Iran by surprise.

In this Special Report we argue that the worst of gold's downturn is likely behind us. Real rates and the dollar — which have reasserted themselves as gold's primary drivers — are set to shift from headwinds to tailwinds for the metal.

Taiwan will not be invaded soon but focus on external constraints, not internal. Strongmen or “visionary” leaders can override geopolitical constraints at critical junctures, at least initially. 

We stick to the view that geopolitical risk has peaked. The US and Iran tensions will increase oil prices, but below a level that will matter for the market. With global liquidity ample, private sector leverage low, and inflation peaking, bears are holding onto an epic collapse of the AI capex to short stocks. Eventually, the capex cycle will end in tears. That much history teaches us. But not yet.