War Likely to ‘Extend Much Further’, Why Metals are Falling

0:00All right, let's move on now and joining us. I'm very pleased to say is our next guest, a Phil of Deal, who's the president of U.S. Money Reserve. Phil, up so much going on in this market, we've seen a global repricing of energy and oil. We've seen a global repricing of rates. We're starting to see a repricing of growth as well. What are your recession checks telling you right now? 50-50. I think we have seen a variety of forces that have been on the sidelines that are beginning to line up and drive those estimates up from around 30% chance of a recession to 50% chance, I think. Okay, what are you watching as far as what we've seen in these commodities? Because, you know, I was just speaking to my colleague KG about the performance in gold. Obviously, we've seen this rotation into these hard assets in recent months and it's been interesting just tracking some of the dynamics in these market. Okay, on a day like this, you have higher dollar gold on the back foot, but all in all, I mean, it's just been fascinating how

1:05the metals have actually reacted to some of the headlines we've been getting out of the Middle East. So, what's your take? Well, the dollar is really the center of this story as far as gold goes. We saw a remarkable repricing of the dollar a fall of about 5% in the period of four to six weeks. That's really an extraordinary rise in the value of the dollar. And so, I think what we're going to see is gold continue to trade sideways for a period of time until we see gold begin to fall again. And I think it will begin to fall again. This administration has a strong interest in lowering the value of the dollar in order to grow American exports and to fulfill its attempt to lower 10 year treasury bills to increase the affordability of housing and car loans and the like. So, I think this is a temporary measure. Even though we've seen this remarkable 5%

2:14change in the value of the dollar, gold has retained about $1,000 in ounce of its increase before that fall occurred. So, I think this the fact that we've seen gold settle at around $4,500 in ounce as good news for the future of gold as we turn around later in the year. And you pointed out that you believe markets are under the estimating the escalation risks here and also underestimating how long the conflict may last. Just talk to us about that. Yeah, I think there's a little bit of whistling through the graveyard right now with the markets. I think there is this momentum of hope that has driven the market for a long period of time during this remarkable bull run. And I think some of the steams beginning to come out of that. I think growing skepticism or concerns about AI are one of the leading indicators that that repricing

3:20of risk and optimism. Gold continuing to set records until this recent correction is also a part of that sort of hedge on the optimism that is driven the market. I think this war is likely to extend much further than what the current sentiment is in the marketplace. The talk about negotiations is really a misnomer. The trading of positions between the parties here between Iran and the United States isn't even occurring directly. It's occurring indirectly through Pakistan. And what's being proposed on paper are really maximalist positions. They are positions that have no chance of being resolved anywhere close to those terms. There's just numerous non-starters in those

4:25proposals. So this is really for window dressing, I believe, for obvious reasons. The administration wants to suggest that they're making progress on ending the war. And Iran is sort of being forced to respond positively that they too want peace, but they have impossible conditions to meet in order to step forward on that regard. Wistling through the graveyard, I really like that analogy. Some would call it resilience, some would call it, I guess, confusion, some would call it complacency, but maybe nonchalant is the best way to describe it. Philip, really appreciate it. We have to leave it there. Thank you so much for your time today. Philip Deal, President U.S., and money reserve. Appreciate it.