Even America’s NATO partners openly admit that the conflict with Iran was ill-advised. And it is clear that the campaign has failed and a face-saving exit is being sought by the US: that’s why threats are followed by deadlines being extended. Don’t forget that this campaign was originally meant to be resolved over a weekend — and here we are in an uneasy truce two months on with the Hormuz Straits closed.

Iran knows it has control over the situation. It also has the conditional backing of China and Russia. This is why it is in no hurry to compromise. Stalemate.

The rest of the world will have to dig in, for Hormuz will be closed for the foreseeable future which could be months. The best hope is that the US quietly backs down without appearing to, and that Israel doesn’t force Iran to retaliate. The situation remains extremely fragile.

Economic consequences

Not only are supplies of energy and essential commodities being withheld from global markets, but other exporting nations of these commodities are curbing their supplies to protect their own industries. China is a prime example likely to be followed by others. The X tweet below by Lucas Ekwueme shows how the combination of Gulf and Chinese export restrictions is intensifying the consequences of the blockade.

Secondary effects of the energy crises are hitting commodity markets. Sulphuric acid whose global supplies are being more than halved is essential for fertiliser production, leaching copper, nickel, and uranium from ore, and chemical manufacturing to mention a few. Soaring energy prices affect energy-intensive production of commodities such as aluminium. JPMorgan recently warned of a two million tonne aluminium deficit driving prices above the 2022 price spike.

Directly and indirectly, every commodity and every economy is affected. There is no doubt that higher commodity prices will lead to a vicious combination of economic slump and higher prices, forcing G7 central banks to expand credit without limit to pay for them. Virtually all G7 nations are in debt traps making the expansion of credit unfundable, other than through very short-term debt instruments.

This is the hyperinflation playbook — a collapsing economy with a collapsing

Read more

These estimates are compiled by Metal Focus for the Silver Institute. But we are left wondering whether they actually capture the full demand picture, particularly the use of silver in photovoltaics. Presumably, use of silver has become more efficient over the last decade, but does an increase of only 21% for total industrial use since 2017, and a decline of 2.7% since 2023 really tell the whole story?

India has stepped up her demand to an estimated 7,000 tonnes last year as well, compared with about 4,000 tonnes in 2024. Both China and India are now seeing investment demand increasing, not just because Asians generally have a greater acceptance of silver as sound money, but they see it as a cheap alternative to gold.

Increasingly, the picture is one of strong industrial demand coupled with growing coin and bar demand against a background of stagnant supply. To try and assess the seriousness of this dual demand squeeze, we need to look at it from China’s viewpoint because it has been her policy suppressing the silver price until recently.

As the second largest producer of silver, China has been drawing down on stocks to satisfy Western industrial demand. That is coming to an end and the market is now tightening.

Read more

Something is wrong with the trade statistics. With that caveat, I hope this interview will alert viewers to the mounting supply shortage in silver, which is also the case in gold.

“Alasdair Macleod is closely watching China's silver inventories, and what he sees has him incredibly bullish. March of 2026 marked record imports of silver for the Middle Kingdom and this, combined with the fact that they tightened export restrictions at the start of the year, makes Alasdair believe that an epic silver squeeze is incoming that could send prices skyrocketing to over $300 an ounce before the year is through.”

Unwrought forms include bars and powder, but not finished products such as photovoltaics.

AI facilities,such as Grok, which rely on articles which may or may not use authoritative sources tell us that China exported about 5,100 tonnes. Accordingly, there is some dispute over the numbers, and we cannot rule out an error in the World Bank’s database, unlikely though it might seem.

However, the acceleration of imports in 2026 Q1 is not contested and the liquidity position in Western capital markets is as I have described.

The monthly cycle of Comex contract expiry has come round again, an incentive for the shorts to mark prices down to make call options expire worthless, shake out week holders, and have a favourable end-month valuation for their positions.

This morning in Europe gold was $4690, down $145 from last Friday’s close and silver at $74.85 was down $5.90. Comex volumes for this month in gold have been very low, while there was better volume in silver. This contrast is illustrated below:

Comex gold probably reflects speculators having difficulty assessing the impact and consequences of the Gulf war. This is confirmed by open interest being extremely low, the black line in the chart below:

The disinterest from traders is against a background of persistent US exports of gold, reflected in Comex warehouse stock levels:

Additionally, US gold mine output is not recorded in the Comex statistics, but is going predominantly to Switzerland for refining into Chinese standard bars to be sent on to guess where? The next chart from Forbes published on April 7 puts the accelerating gold drain even more graphically:

While we are looking at gold prices wondering if we should buy or sell, the Asians particularly the Chinese are draining all America’s physical liquidity leaving it an empty paper shell — rather like an abandoned wasps’ nest. That’s bad enough, but the situation in silver is even more stark.

The chart below shows Comex open interest is still at 20-year lows:

Read more

“Gold is still trading near elevated levels — around $4,700 to $4,800 an ounce — even as a stronger US dollar and firm bond yields weigh on prices. That tension is at the centre of the current market debate.

”In an interview with MINING.COM, Alasdair Macleod, a former banker and gold market analyst, argues the real shift is happening in China. He points to large volumes of gold absorbed through the Shanghai Gold Exchange and steady domestic production, suggesting a significant share of global supply is moving East — and not returning.

”The question now is whether gold is still reacting to short-term macro forces, or whether changes in ownership are beginning to reshape the market.”

After Mexico, China is the second largest national producer of silver at 110 million ounces (3,421 tonnes), including extraction from non-ferrous ores.

For years, growing global demand has led to substantial supply deficits, reflected in the Silver Institute’s calculations below.

On these estimates, there have been seven years of deficit allowing for ETPs —more commonly referred to as ETF investment vehicles. And we are heading for another deficit this year, which UBS estimates will be 293moz against Metals Focus’s 76.3moz.

The reason silver’s price has not reflected these deficits in the past is that China has been managing the price, probably for decades ever since the PBOC was given sole responsibility for managing the nation’s stocks in 1983. It explains why until 2025 the price was suppressed reflected in a rising gold/silver ratio.

China’s silver exports, technically unwrought silver in the trade statistic category HS7106.91 are shown below.

Read more

This article delves into China’s gold accumulation policies, initially by the State between 1983—2002, and then by her citizenry. The amounts accumulated in the last 43 years are truly staggering. And now, as a rising bullion price has begun to reflect an acceleration in the weakening of the fiat dollar and other G7 currency values, a shift in China’s household savings demand from bank deposits into gold accumulation accounts will create a crisis driving gold (and silver) prices substantially higher.

This development will in itself accelerate the decline of the dollar-based fiat currency system and bring forward its final collapse.

The background

In 1983, the Peoples Bank of China was appointed with total responsibility for acquiring and managing the nation’s gold reserves. It is important to note that the PBOC’s own gold reserves do not capture the extent of the PBOC’s accumulation, confirmed in the original Regulations. Article 3 in English translation states:

Read more

First, let’s look at last week’s events for gold and silver.

Gold and silver were little changed on the week, with gold at $4785 in European morning trade, up $40 on the week, and silver at $79 was up $3.05. Trade in silver on Comex has picked up to moderate levels, while in gold it remains subdued.

Open interest in both Comex contracts remain very low. This is illustrated next:

Both markets, but particularly silver appear thin with little speculator interest providing liquidity. It has been noticeable this week that both contracts reflect demand in Asian hours with prices firming during Shanghai’s trading. But this demand diminishes while Asia sleeps.

So far, these diurnal influences are relatively minor being against a background of hope triumphing over reality with respect to the war against Iran. Equity markets around the world are hitting new highs despite the inflationary pressures in the pipeline which are bound to drive up bond yields.

On the positive side for gold, France very cleverly sidestepped the issue of whether its earmarked gold at the New York Fed actually existed by selling it to the Fed for printed dollars with which it bought gold to cover in the markets. The message to other holders of the 5,860 metric tonnes of earmarked gold at the NY Fed is that they should do the same. But in these markets, instead of a covered bear operation it would be wiser to buy the gold first, then sell its earmarked position to the Fed. The Fed prints the dollars, and everyone gets their gold.

Meanwhile, there’s a disconnection between physical oil prices, which are as much as $150 while futures trade at $90. And we all thought that markets were anticipatory in nature: clearly not in this case. Gold bugs have long suspected that what we are seeing in oil is what happens or is going to happen in gold and silver.

Such hopes might still be premature. Whatever happens over Iran and Lebanon, one thing is certain: there will be a global inflation-cum-slump shock, particularly if Hormuz doesn’t fully open soon and the Houthis don’t kick off at the Bab al-Mandab straits cutting off Suez and 6m barrels of oil per day from Saudi’s Yanbu terminal.

Short term issues for gold and silver

Read more

Suddenly, gold and silver appear to have bottomed out and are marching higher. Led by energy, the entire commodity complex is donning its marching boots and setting off for higher pastures. This is the reaction to the US blockade in the Sea of Oman. Mine supplies of base metals and silver are threatened by energy costs and shortages of vital chemicals such as sulphuric acid. The impact on consumer prices is being seriously underestimated.

It’s not just supplies of energy and downstream products such as sulphuric acid and fertilisers being restricted as a result of America’s war on Iran, and now its blockade of a blockade. Other national exporters of these vital commodities are hoarding their supplies, withdrawing them from global markets. There are signs that China is also tightening up on silver and rare earths. Why would they do otherwise?

Paper prices under-represent the impact. Dated Brent FOB Northern Europe is trading at $145—$150, over 50% above paper futures, according to today’s Daily Telegraph. Think about that for a moment!

Yet markets ignore the reality, just as the blockade intensifies.

Read more

As usual, general commentary plays down the consequences of today’s Hormuz crisis, which is entering a new phase with the much-heralded talks in Islamabad now stillborn. The fact of the matter is that the US and its Israeli lobby will not accept Iran’s red lines, and the war which is already lost will continue. Not only that, but the Houthis will almost certainly restrict shipping in the Red Sea or stop it altogether as the war escalates.

Admittedly, the 1973 crisis which was similarly driven by a conflict between Arab petroleum exporters and Israel led to a substantial increase of the oil price from $3 per barrel to $12. So far, the Iran war has only led to a 60% rise, but it is changing hands in Asia at more than double and doubtless there’s more to come.

The 1973 crisis led to the combined economic slump and inflation shock, peaking at 11.1% in 1974 in the US, 24.2% in the UK in 1975, 13.7% in France in 1974, and 23.2% in Japan in 1974. Why should it be different this time?

Read more

Consequently, investment managers see the risk-free position to be cash in their accounting currency, even to the extent of not buying physical gold or silver ETFs. It amounts to a cop-out. This meddling with markets by the authorities is at the root of the current period of confusion in western capital markets over how to respond to black swan events such as the war against Iran.

This week’s stasis continues

Read more

Turkey is a different matter but is a little more complex than headline numbers suggest. It should be noted that there is a healthy gold trade between the central bank and commercial banks with frequent leases and swaps between them.

The reason is that both commercial banks and their customers have had for a long time a significant interest in gold as a hedge from a chronically weak lira. Don’t forget that in 2005 the process began of creating the new lira at an exchange rate of a million for the old one. And that in the last 10 years, the new lira has declined further from under 2 to the dollar to 44.6 currently.

The gold trade has become a regulator of money supply. By swapping with or selling

Read more

“Are we witnessing the final act of the fiat currency system? Join Dunagun Kaiser and Alasdair MacLeod as they break down:

The coming surge in U.S. and G7 bond yields
How the dollar and other major currencies are losing purchasing power
Why gold and silver demand is exploding globally, especially in Asia
The risks for Western investors, pensions, and 401Ks”

Follow Alasdair McLeod for more in-depth analysis:

MacleodFinance Substack

Dedicated to explaining why gold is money and the rest is credit. Dedicated to explaining economics relevant to the preservation of wealth. And dedicated to explaining geopolitical developments relevant to investors.

By Alasdair Macleod

This week’s market action

Until this morning, gold and silver were enjoying a reasonable rally while the broader markets appeared to be under the impression that in the war against Iran America’s proposals to end it would get some traction. But markets appeared to be ignoring Iran’s denials that any talks were taking place.

Consequently, President Trump’s address to the nation last night was a disappointment for markets still adjusting to the inflationary implications of a likely prolonged closure of the Hormuz Straits, and Houthi statements that the Bab el-Mandeb straits at the entrance to the Red Sea and therefore Suez would be closed as well.

In early European trading this morning, most of this week’s rally in gold and silver were wiped out. Gold was at $4620, up a net $130 from last Friday’s close and silver at $71.20 was up $1.45. Trade on Comex was subdued ahead of the Good Friday holiday in Western Europe.

Understanding the outlook

Read more

“Alasdair Macleod returns to Macroscopic with a stark warning: the conflict with Iran is not just another geopolitical flashpoint, but a potential catalyst for the endgame of the global fiat currency system. In this conversation, he explains why the real story is not only war or oil, but the chain reaction from energy disruption to higher bond yields, collapsing credit, and a broader monetary crisis.

”We discuss why Alasdair believes bond markets are now the most important signal to watch, why Japan may be the hidden trigger for a global debt unwind, and why a move above 5% on the US 10-year Treasury could break equity markets. He also lays out why he sees the recent correction in gold as a paper shakeout rather than a fundamental reversal, and why physical demand from the East continues to reshape the gold market.

”The conversation also covers the Strait of Hormuz, inflation risks, the future of the petrodollar, yuan-based trade, private credit fragility, and why Alasdair argues that investors need to think differently about money, credit, and real wealth. His conclusion is blunt: get out of credit and understand the role of gold before the next phase of this macro shift arrives.”

The reason markets are slow to react is that the seriousness of the Hormuz situation is yet to fully dawn on them, despite all the US president’s propaganda that it’s going swimmingly. The media suspects that it is not but are too frightened to say it. But the reality undermining the Trump/Hegseth kick-ass narrative is gradually being exposed.

Already, Japan is feeling the crisis because she is highly dependent on energy from the Gulf. Bond yields are already in an exponential acceleration, and when (not if) the dollar/yen rate falls through 160 (scale below is inverted) Japan will have its Wile E. Coyote moment.

Read more

Already the majority of G7 bond yields have broken out on the upside and given the emerging inflation outlook the US 10-year note is bound to as well. The destruction to government finances is such that foreigner investors as well as growing numbers of investment professionals in America will diagnose a debt trap. The yield closed on Friday at 4.44%. A move towards 5% and through it will fully confirm this outlook.

According to the US Treasury’s TIC figures, the table below shows investments of the principal Gulf states in US financial securities:

Read more

The combined US—Israeli attacks on Iran are a failure by any measure, leading to a geopolitical and economic crisis for the US, her allies, and their fiat currencies.

“Who rules East Europe commands the Heartland; Who rules the Heartland commands the World-island; Who rules the World-island commands the World.” Halford Mackinder, 1905

Halford Mackinder with his Heartland Theory is credited with inventing geopolitics. 126 years later, we are finding out whether his heartland theory was right. His pivot area in the map above is dominated by Russia, China and Iran. And it can be already said that apart from Western Europe and the two “Outers” of Britain and Japan, they control the Inner or Marginal Crescent. The Middle East is the exception.

Control of the Middle East with its energy resources is obviously key in a geopolitical context, and in attacking Iran the US appears to be losing it. Iran insists that the Gulf states close down US military bases on pain of their destruction. Israel will then become isolated, and she will have no alternative but to parlay with the proximate hegemons of Russia and China, and arguably Iran as well. This is clear from Mackinder’s theory.

If the US is to challenge the Asian hegemons, she will need to defeat Iran. As a minimum that requires a full-scale invasion, deploying not just the 450,000 active-

Read more