World Peace Declared (not really). Oil plunges. Stocks,gold,silver, bitcoin all soar. I tell you why

Hello dear friends. My name is Clive

Thompson and today we're going to be

looking at what peace means for the oil

price and what it means for the gold

price.

So you may have heard that in the last

24 hours the plan to obliterate Iran and

the Iranian population has been

postponed for another 10 days or so. uh

the peace plan if you like and I'm

calling it that cuz maybe it's not peace

but this the peace plan has been worked

out or negotiated by Pakistan and

they've managed to get both sides to

agree to at least a ceasefire so it's

not peace uh but I'd like to be here to

tell you that world peace has been

declared but it's not April the 1st so I

probably won't be able to do that um

anyway so we've got a situation where

the uh ceasefire has been agreed And

apparently uh Iran is going to allow

ships to go through the Gulf of Hormuz

on their conditions, but we don't know

what those conditions will be. Maybe

they're going to charge the $2 million

uh dollars tariff that they were talking

about, which has been talked about. I

don't know. Uh maybe they're going to

allow certain ships through and not

others. It's not very clear, but at

least uh the agreement uh seems to imply

that ships will be allowed through the

Gulf of Cormuz at the moment. And of

course there's a many there are large

number of ships on the wrong side of the

Gulf of uh straight of Hormuz sorry not

the Gulf of Hormuz large number of ships

on the wrong side of the straight of

Hormuz who want to get through. Um so

who's going to be the first? We'll we'll

we'll see. Um but what does it mean for

the oil price? Well, the oil price

immediately collapsed on the news that

uh this uh deadline which not will not

be moved has been moved uh moved back.

So, the oil price, which was sort of

$106, $108, is now down to um 98 96. I'm

just bringing that up on my screen. You

can't see it uh because I'm uh just on

holiday at the moment, but uh let's have

a look. Uh commodities.

I'm bringing that up. Yeah. So, we got

Brent crude, uh West, sorry, West Texas

is at $95,

down from about 108. and Brent is at

92.46.

Uh both prices having come down sharply

in the last 24 hours. Uh we also saw a

huge rally in the US stock futures and

we're this morning we're seeing a a

large rally in European indices. Uh so

European stock markets are all rising um

uh because of this apparent good news.

Uh the the feeling is that something

will be negotiated uh before we get to

the next deadline. Um now Iran says uh

that United States has agreed to all of

their 10 demands. Um United States has

said uh that uh the the demands of Iran

are something which are worth

negotiating. Um obviously Iran isn't

going to get whatever it 10 demands are,

but uh uh nor is the United States going

to get what they're demanding. So we'll

see if they can find some middle ground.

Let's hope that they can cuz I think

everybody in the world would like to

have a peaceful world rather than a

world where you risk getting a bomb

dropped on your head. Now the what what

had been said was they were going to

bomb all the bridges in Iran and all the

power plants in Iran. Now you take out

all the electricity and take out all the

bridges. But you know who's the pilot

who's going to drop the bomb on those

bridges? Those bridges are full of

hundreds sometimes thousands of people.

uh you know who these are civilians. Uh

they're not uh they're not the military.

Um and of course you know you can't dis

if you're a pilot and you're told to do

it, you can't disobey either. Um so bit

of a dilemma there. But anyway, the good

news is they're not going to do it for

the time being and hopefully uh never.

Um world markets are up. So for example,

the Hang Sang index which uh is in Hong

Kong uh up 3.09% 09% as I speak. It will

have already closed in fact. Um then

we've got the Swiss market index up 3%.

Uh we've got the Footsie 100 up 1.5%.

We've got the DAX up 4.6. Big big leap

there. Cat current in France up 2.73. Uh

the Italian index it's uh flat. It's at

is down 0.47 actually. Uh the Euro

stocks uh 600 index 600 stocks in Europe

is up 3.45%.

the US markets are going to open up

sharply higher. Um so for example uh the

more tech the more techy the company,

the more technology oriented it is, the

higher it's going. So for example, Tesla

is set to open up nearly 5% higher at um

up $1641

according to what the futures are saying

uh or what the out of ours trading is

saying. Palanteer is going to got 3.82%

higher. Um, Nvidia is going to open up

3.61 higher. Just to give you a few

examples, see if there's any big ones.

Micron Technology, who make DRAM trips

amongst other things, up 10.39%

in the uh pre-opening. Um, Micro

Strategy, the Bitcoin company, if you

like, they own a lot of Bitcoin. Um, up

6.85 in pre-trading. Uh, 6.85% that is

at 123.72.

Meta will be 4.71%.

Um, Eli Liy 1.66%,

Intel up 5.27%.

Google up 4.14%.

Um, gold is rallying strongly. So, we

we'll get to the gold price in a minute,

but I'm just looking at the GDX. Uh,

that should rise very strongly on the

open. Um, the that the GDX is the VANC

gold miners exchange traded fund. So it

represents a basket of gold mining and

some silver mining companies and uh the

price of the GDX which is the symbol for

that stock uh reflect the underlying net

asset value. Uh so let's just have a

quick look what's happening to gold and

silver uh this morning should be

strongly higher. Now, this this is kind

of counterintuitive because we don't

usually expect gold to go down where we

hear peace and uh we usually expect to

go down where we hear peace and we

expected to go up where we hear war. But

this time it's done the opposite. When

the war started, the gold price plunged

and now we're having a a ceasefire. The

gold price is rising strongly. I'm going

to explain why that's happening in a

minute. But first, what is the gold

price doing today? It's up $89 at

$4,795.

Um, so it's not far off the all-time

peak, which is about $5,500

uh at the end of January. The silver

price is up sharply, too. It's up 5.37%

today at 76.87,

$76.87.

Um, platinum is just above 2,000 at 2009

and palladium is just above 1,500 at

153.

Uh, they're both up about 3.7% platinum

and palladium. Uh, so silver up 5 and a

half nearly and gold up nearly 2%.

Um, why is gold rising when we have a

ceasefire? It's kind of

counterintuitive. Well, the reason is

people are saying ceasefire probably

means more ships get through the gul the

straight of Hormuz. More ships going

through the straight of Hormuz means a

lower oil price. A lower oil price means

less pressure on inflation. Means the

Federal Reserve has got more

possibilities to reduce interest rates

which they might do because the economy

is slowing. That's clear. Um and they

can say well we had this blip inflation

which we have we are seeing at the

moment where inflation is up but they

can say well now the oil price is down

the pressure on um prices isn't so great

so perhaps we can anticipate the uh

inflationary

forces the pressures of inflation coming

away. So yes we can reduce interest

rates. Now if you reduce interest rates

that means the real rate of interest

that is to say the interest rate minus

the inflation rate gets a little bit

less and if the real rate of interest is

less it means the incentive to hold uh