The WWIII Trade

As war rages on in Iran and Israel, equities are down overall while defense stocks are surging, and both gold and silver have bounced, followed by volatile corrections. You could take a lot of guesses about how to trade the war and chaos—but the surest chaos bet will always be precious metals, especially in the longer term.

All eyes are on the Middle East as  and the world wonders how the conflict will escalate—and both when and how the US and other major powers will get directly involved. Nation-states like China keep aggressively buying gold as tensions explode, and they won’t publish their true holdings because they don’t want the rest of the world to know just how hard they’re stacking. 

During similar geopolitical crises, gold and silver have historically rallied. In the late 1970s into 1980, during the Iranian Revolution and the subsequent hostage crisis, gold prices surged. Silver also saw dramatic gains, peaking in 1980, driven by both geopolitical fears and speculative trading by the Hunt brothers. More recently, in 2019-2020, amid US-Iran tensions following the killing of Qassem Soleimani, gold rose dramatically. Silver followed, with even more spectacular gains after the historical COVID-era “stimulus” cycle that flooded the system with freshly-printed money.