Commodities like oil and precious metals have stabilized over the past several months after the uptick during the United States Presidential Election. But this has not been the case since the recent missile strike. Gold and silver increased by 1.07% and 1.02% respectively. Oil is up 1.26%. These increases were observed overnight after the attacks. Analysts suggest that even after the spikes in crude oil, the price per barrel should fall back below $50/barrel. As tensions grow in Syria and the Middle East, what will this mean for future oil flows?
Reference:
http://www.businessinsider.com/gold-silver-oil-price-reaction-us-missile-strike-syria-april-7-2017-4
Eric and Dustin
Thank you for sharing this article, it is always interesting that in times of unrest people still try to horde gold and silver. It seems like that is a story as old as time. What the article doesn't mention is how in modern times, not only do precious metals spike, but so do defense contractor stocks. I am sure if you looked at Boeing, Lockheed, Raytheon, etc. you will see a spike that matches gold and silver.
ReplyDeleteRegards,
Zane
Cause and effect in the areas you describe are not easily proven, but your speculation is interesting nonetheless. Have you attempted to correlate the data? Try it! Gold and silver have climbed since March, but surprisingly so since interest rate hikes normally push precious metals down. If you are curious about current defense contracts, they are fully visible online. Here, however, is a radio/article from November on Federal News Radio. (Interesting site to follow from time to time). You might try to correlate overseas activity with these too. http://federalnewsradio.com/contractsawards/2016/11/3-market-trends-and-20-federal-contracts-vendors-should-know-about/
ReplyDeleteI have not went the length to complete a regression analysis. However, over the years I have noticed that metals seem to follow interest rates. I have also noticed that whenever there is a crisis, there is a spike in metals and oil. Another observation I made was that when there is a steady increase in the stock market, spot price of metals (with exception to gold) go down. I can not say for sure that the spikes are due to supply and demand, as there have been talk of price manipulations for years.
DeleteIn theory with the oil, we have oil reserves that we have always kept on hold and very seldom used. This was meant to take up the slack in times of stress. This is very much a reaction to the systems and their fluctuations.
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