Gold price to DOUBLE by 2026

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What a weekend, eh…?!

The absolute STATE of social media after Iran retaliated against Israel, who were themselves retaliating against Iranian backed Houthis who were retaliating…

Wait. How far do you want to go back?

This conflict has been going on for DECADES.

From a humanitarian perspective, it’s obviously horrific, but it’s (sadly) nothing new.

From a social media perspective, World War 3 is IMMINENT!!!!

Geopolitical experts spawned overnight… 😉

Yet from a markets perspective, it’s just another risk to add to the growing list. One more thing to keep an eye on (and lower on that list than the everyday person would expect - more on that in a sec).

Here’s Wells Fargo with a balanced view on the events:

Everyone’s done their symbolising now. Faces have been saved.

The US is unlikely to support a Middle East war in election year, as any sanctions on Iran are likely to push energy prices up…

Voters are not big fans of rising energy prices.

Over-Reaction As A Signal

Moving on from the war reactionaries, gold is fascinating right now.

It’s rallied an absolute boatload (technical term) over the past six months or so.

Nobody really knew why.

Sure, we heard some vague, tired theories around Chinese buying and US debt being unsustainable, but nothing backed by any sort of conviction.

Nothing that leaps off the page and makes you take notice.

On Friday, an ARMY of explainers appeared out of nowhere to ruin everyone’s fun…

It’s an unproven scientific FACT that once the explainers arrive, everyone starts heading for the exits.

It's a well known rule that once there's a 'reason' for a move then there's something to bet against so the odds of price falling drastically increase.

The timing was perfect.

Gold rallied to new highs before violently reversing, giving back all the daily gains and more, closing lower by 1.2% on the day.

Not to worry though, another couple of years and we’re heading to $4,000 an oz (according to the UBS crystal ball):

Citi says it’ll hit $3,000 in six short months, or maybe 18. Who cares about precision!

It’s common to see ridiculous price targets like these when a trend has overheated.

Along with the hoardes of explainers, we’re tempted to say the gold top is in for a while.

A brave, maybe stupid call. Let’s see.

Positioning isn’t extreme yet, although it has picked up a lot…

Plenty of reasons to think that gold will need to take a breather and await fresh impetus before we can talk seriously about another leg higher, let alone $4,000.

ICYMI

There’s no bear market in coffee prices…

Up by a glorious 25% since we shouted it as “the next cocoa” at the start of March.

We also spoke last week about war stocks and reasons why the S&P500 could be doomed for a bit.

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What you need to know this week

The UK economy is creaking…

Today’s unemployment data will dominate the headlines: UK unemployment rate jumps to 4.2% as labour market cools.

Talking heads and theorists will focus on wage growth being high and “not consistent with inflation at the Bank of England’s 2% target”.

As always, they’ll be absolutely right, while missing the bigger picture.

Pay growth is high, but that’s a symptom of the underlying problem, not the cause.

The jobs market is BROKEN!!!

Look at that jump in long-term unemployed:

When you dig under the surface this increase in unemployment isn’t down to mass redundancies.

There simply aren’t enough people

• Willing to work

• Able to work

• With the skills employers need

2.83 million Brits are “economically inactive” due to ill health:

The UK economy is dysfunctional & needs a drastic overhaul. 

It won’t happen overnight.

The most important chart of the week

Superdry hung out to err… dry

The once iconic fashion brand is losing the battle to survive and now plans to de-list from the London Stock Exchange, restructure debts, issue more shares, reduce rents.

You name it, they’re doing it.

CEO Julian Dunkerton has one final challenge to overcome.

Admit that the brand he co-founded is not as cool as it used to be, or step down and bring in someone who will.

You can’t fix a problem unless you believe it exists.