The War Continues

Despite a significant number of Republicans defecting, the House of Representatives recently tied in a vote relating to reducing Trump's war powers. The War Powers Resolution in the US makes it mandatory for any unauthorised military actions to cease inside a 60-day window. The recent tie means that the conflict can continue.

It may be worth asking: even if Trump was shut down, could he simply claim that a ceasefire has been achieved and a basic victory secured? Then, once tensions ramp up, he could declare a new and separate operation. Trump has already tried to sidestep the vote by saying that a ceasefire agreement renders the deadline moot. Trump got what he wanted this time, but it may be worth noting that there seems to usually be a backup plan.

Neither the US nor Iran have been significantly backing down. This means soaring fuel costs may not disappear any time soon. Persistently elevated energy prices could keep upward pressure on the cost of everything oil helps create, and central banks may be pressured to avoid cutting rates.

Gold prices have refused to pump or dump. Instead, a bullish pattern appears to be forming. On the weekly chart, notice all the wicks attempting to reach lower. Dips have so far been aggressively bought.

If aggressive dip buying continues, and the war keeps dragging out while profit margins on US tech stocks look stretched, safe havens may remain a sound choice.

At Ainslie Bullion, we have been helping Australians own physical gold and silver since 1974. Our team can walk you through what is available.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.