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Geopolitical tensions are heating up, and Alex Reid and Geof Smith are breaking down the specific flows moving the market. Tune in to see where they’re finding an edge in the volatile oil markets, and get Alex’s top ticker to play ahead of the SpaceX IPO this week! [tap to join us for Profit Panel]
Markets have a funny way of fixating on the wrong thing. Right now, investors are glued to headlines about Iran and the Strait of Hormuz. And sure, around 20% of oil flows through that chokepoint.
But that also means 80% doesn’t, and the rest of the global energy system is carrying on just fine.
This kind of narrow focus leads to lazy explanations. Any time the market sells off, someone immediately trots out a storyline, like traders dumping stocks to raise cash for some hyped-up IPO.
These narratives catch fire even when they make no sense because people crave simple answers for complex moves.
The problem is that this tunnel vision is warping pricing across commodities. Gold has been reacting almost exclusively to crude oil and Iran. Silver too.
The fundamentals that should matter have been shoved into the background — including one of the most important developments in years: Central banks are shifting reserves away from Treasuries and into gold.
With national debt blowing past $39 trillion and rates rising, trust in sovereign paper is fading. Higher rates have pushed the dollar up as well, and that strength has been sitting on gold and silver like a weight plate.
Once these pressures ease or get repriced, metals have plenty of room to run.
The Signals Beneath the Noise
The distortions aren’t limited to metals. Crude oil has been selling off while gasoline has been trying to rally, a strange split explained not by geopolitics but by refining bottlenecks.
Over the past 10 to 15 years, the U.S. has shut down refining capacity and, in many cases, bulldozed facilities entirely. Even when crude supply looks fine, fewer refineries mean persistent bottlenecks that keep gasoline pricing firm.
This is real-world supply stress, not headline drama.
Power grids are showing similar strain. Utilities in parts of the Southeast have already told customers to conserve electricity because they don’t have enough capacity to keep up with air-conditioning demand.
These are fundamental pressures the market should be focusing on — yet they get buried under whatever geopolitical narrative happens to be trending.
What Will Lead When the Fog Clears
Once investors shift their attention back to fundamentals, leadership is likely to look different. Copper is already closer to its all-time high than gold or silver and is positioned to lead the next leg higher.
That kind of strength in an industrial metal is a better indicator of underlying demand than any headline coming out of the Middle East.
For now, uncertainty has translated into choppy, low-volume trading. We’ve seen sharp pullbacks on weak participation, with markets still stuck inside narrow intraday ranges.
That kind of indecision often precedes a sharp recalibration once the noise dies down.
The opportunity is in understanding the 80% the market is ignoring. When focus returns to what truly drives supply, demand, and capital flows, the move back to reality can be fast — and rewarding for those who were paying attention.
Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Wall Street’s Dirtiest Secret Yet…
I recently began sharing a secret report with my tight circle of buddies about hidden orders from Wall Street that send stocks higher within days…
Disclaimer: The trades expressed today are based on signals from the Sleeper Cell Scanner with the benefit of 20/20 hindsight unless otherwise stated. According to a backtest of 64 years of data dating back to 1962, the signals pulled by the scanner would have been 81.9% accurate on over 7,300 trade signals… No strategy is perfect, and wins are not guaranteed. There are bound to be winners and losers along the way. Since the Sleeper Cell Scanner is a tool for traders and not a trading service, profits and performance will vary among users.
