We will provide a fuller update after US equity and bond markets close today but we wanted to provide a very quick overview of what we believe to be the most important news likely to affect market prices for gold and digital currencies.
US and Saudi investigators are working quickly to assess who is responsible for the weekend attacks on the Aramco oil processing facilities.
Irrespectively of who is ultimately deemed to be held responsible (whether warring factions in Iraq or Yemen or maybe even from Iran directly), we are confident that these particular facilities owned by this particular company were chosen as a target because the owner of the facilities was in the final stages of planning the world’s largest even IPO stock offering. Saudi Aramco (the facilities’ owner) is the state-owned oil company of the Kingdom of Saudi Arabia. It is planning to sell a minority equity stake to the public on a number of stock exchanges (including Riyadh and Hong Kong).
Based only on our understanding of economics, history and warfare, we are confident that the weekend targets were chosen almost exclusively to cause potential investors not to invest in the upcoming IPO.
Gold is currently trading above $1500 at $1512, up $12.40 on the day (source: CNBC.com) while digital currency prices are mixed over the past 24 hours BTC has traded down 1% in the last 24 hours to $10,226 and ETH is up 1.4% to $191.
We believe traders will be considering investments for their potential to hold value in the event of armed conflict or an oil-price-shock-induced rise in inflation, and the possible economic ramifications on the other.
More after market close today.
Tim Shaler is Chief Economist of iTrust Capital. He is a published Real Estate economist, was a portfolio manager and asset allocation expert at his previous firms and is an adjunct professor at Webster University. His MBA (Finance) and MA in Russian Economic History are both from the University of Chicago.
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