Gold
The escalating Israel-Iran conflict has boosted oil prices. We are positioning for further geopolitical escalation, uncertainty, and the economic fallout through two strategies that benefit from both near- and long-term upside.
Investors should hold gold, build up some cash, tactically overweight US equities relative to global, and prepare for at least minor oil supply shocks – possibly major shocks – as the Israel-Iran war escalates.
Investors often rely on past relationships to predict future outcomes. This strategy is at risk now that several commodity correlations have broken down. We explore the causes and sustainability of the new commodity relationships.
This week our three screeners explore equity trades in gold mining stocks, European banks, and US stocks ex-Tech should a recession not be imminent.
Oil, copper, and gold futures curves have recently experienced abnormal shifts and twists. Brent is no longer fully backwardated, copper curves on the LME and CME have diverged, and gold is in a steep contango.
We examine the drivers and implications of these shifts for prices and curve structure across the three commodities.
MacroQuant sees the risks to US growth as being to the downside and the risks to inflation as being to the upside. Such a stagflationary brew justifies an underweight on stocks.
MacroQuant sees the risks to US growth as being to the downside and the risks to inflation as being to the upside. Such a stagflationary brew justifies an underweight on stocks.