TMAD Commodities: Oil Falls Below $80, What's Next?

$USO $GLD $SLV $CPER

Hello Traders,

The long-awaited peace deal between the U.S. and Iran is finally taking shape, with an MOU expected to kick off a 60-day window for final terms. While President Trump’s threat of military action if the deal fails adds a layer of uncertainty, the agreement is a major step toward reopening the Strait of Hormuz.

However don't expect a quick fix, clearing mines and restoring tanker traffic will take weeks, if not months. This supply delay is exactly what oil bulls are leaning on to keep WTI supported above $65.

DOLLAR REBOUND

The Fed has a new boss, and the "hand-holding" is officially over. Chairman Warsh isn't playing the game of predicting future moves, leaving the market to fend for itself. Please read our latest post-FOMC preview here.

Since investors now see a rate hike as a real possibility by year-end, the dollar is rallying. This is bad news for gold and silver; until the greenback cools off, expect precious metals to remain under significant pressure.

POSITIONING UPDATE

GLD 0.00%↑ GOLD ETF