00:00It seems as if we're seeing quite a lot of geographic divergence in terms of the response
00:04to this new geopolitical threat to war in Iran. It's been an incredible session in Asia. A lot
00:11of negativity, a lot of negative prints on the screen. Is it over, do you think, by any stretch?
00:19I think, first of all, no. The negative impact from the conflict in Iran is not over. And that's
00:26because we're just not going to have an easy full flow of energy from the Middle East for
00:31a good while to come. I know there have been promises made, RE potential insurance, RE potential
00:36escorts for boats are still going to take even the most optimistic scenario. That's still
00:40a few days away from being implemented and probably quite a while before we get a full
00:44flow of energy. So you've got some sort of energy shock that's still going to feed through
00:48to markets. And you've got to remember the context where we've been. It's an incredible
00:51day in Asia. Some of the size and scopes are immense. The worst day for Korean stocks ever.
00:56It's the worst. They've only had two trading days. And it's already the worst month for
01:00Korean stocks since 2008. Quite dramatic. But on the flip side, the stock market in
01:04Korea is still up more than 20% year to date. And I think that's the context you've got to
01:07remember is that when you look at year to date moves, most assets seem to be doing phenomenally
01:11well, which kind of justifies the idea from David Solomon that it's been a benign reaction
01:16so far. This does not look like a year where we've had a major multi-nation war fully involved
01:22in the US and the Middle East and a sort of energy shock. It looks like overall
01:26and year to date assets doing pretty well. And that's the context which you need to see
01:29this. So therefore, I think we get much more of a correction across assets over the coming
01:33weeks, significantly more. But I don't think that's a sudden, you know, panic mongering
01:38bear market. It's just that, hey, the year has been bizarrely good up until last week.
01:42We've got more of a correction to come.
01:45Mark, in that context, we have gold up today. Balal Hafiz just told us that it's got further
01:50to climb. But you don't agree.
01:54I disagree. Now, I think he might be talking a much longer term horizon. Sure, central banks
02:00don't want to buy. Some of the longer term themes are there. But in the short term, and
02:04what I mean by the short term, I mean the next couple of weeks or so, I think gold's got
02:07quite a bit of downside. I think there were three primary reasons, marginal reasons for
02:11buying the dollar recently. One is geopolitical risks. Well done. If you bought for geopolitical
02:16risks, you got your big multi-nation war, one of the biggest wars, you know, we've seen
02:21for some time. Therefore, the trade has run. What more are you expecting from now? Just,
02:25you know, we've already got full US engagement. We've got multiple nations being struck by
02:28missiles. So that trade's run. The other one, if you're doing to diversify away from the
02:33dollar, well, we're about to get it. We're in a dollar bull market again now. Maybe not
02:36a bull market, maybe a bit of stretch, but we're in a dollar strengthening environment
02:39for as long as the conflict lasts. And that will go much further. So you don't want to buy
02:42it right now to diversify away from the dollar. And the third one is just the idea that, hey,
02:47all these momentum stocks are doing so well, things like the Cosby, et cetera. So you therefore
02:51just pile into all the momentum trades. Well, that one's now blowing up. Just look here,
02:54monitored. That's blown up over the past week. So the three primary reasons recently for the
02:58last kind of few months of gold have all changed. Dollars reversed, yields reversed,
03:02political thing has run its course and the momentum trades have blown up. So therefore,
03:06then gold's got quite a bit of downside for the next couple of weeks.
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