00:00An explosive rally in precious metals developing into a multi-day round.
00:04Gold extending losses this morning at one point, nearing its biggest two-day drop in more than four decades.
00:09Bloomberg's Will Kennedy joins us now for more.
00:11Will, I think we're all waking up and asking the same question.
00:13What happened over the previous few days and what was this this morning?
00:17Well, I think that we quoted someone today that this trade had become very, very crowded
00:22and clearly the precious metals rally is a story that's been developing over the last year
00:27and it just accelerated and accelerated and I think it got to the point where it was unsustainable
00:32and some form of correction was necessary.
00:35But yes, indeed, it's been dramatic and I think it's been particularly dramatic
00:38because both the up and now the down has been driven by a lot of retail investors
00:43coming in through ETFs and now coming out, especially in China.
00:47Will, it's not just what's happening in precious metals.
00:50It's also base metals. We've seen it in copper as well.
00:52And this morning you're seeing it in crude. WTI and Brent down by 5% or so.
00:56Are they different stories or the same thing?
01:00It's partly the same thing.
01:02I think that what's happened in precious has got people a little bit bearish
01:04on the whole commodities complex.
01:06But in oil there is also the Iran in the background.
01:09There are signs that Iran and the US are talking
01:12and that they may be able to avoid a conflict.
01:15And of course that is the biggest geopolitical risk in the oil market right now.
01:19The threats that we've heard from President Trump that he may take military action against Iran.
01:24And if those threats are off the table for a while, it's quite bearish for crude.
01:28So you've got that story.
01:30You've got the commodities sell-off.
01:31You've got the dollar playing into commodities as well.
01:34And you put that together.
01:35And that's why we've seen this quite chunky move in crude this morning.
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