I’ve written consistently about the larger cycle into the end of this decade: a powerful revaluation of commodities, led by precious metals, occurring alongside a generational asset-class rotation out of financialised assets. This entire era has been built on extreme government intervention, debt bubble creation, and extreme leverage, driving the biggest misallocation of capital in modern history.
Now the question I’ve been asked repeatedly over the last two weeks is simple………..
If we have war with Iran and energy prices exploding higher, why have precious metals not surged, and in fact have fallen?
To answer that, you must understand one key reality:
Markets do not move in straight lines, and they do not react on one single variable. They react in phases, the ebb’s and flow in global capital flow and cycle timeframes matter.
My overall personal time frames of a global recession have been expedited by the start of this middle-east war, which is having negative consequences on the global stage.
1) We Are in a Risk-Asset Liquidation Phase
Right now, we are in the middle of a broad global liquidation across risk assets.
The war has not unfolded as markets initially expected. The US/Israel strategy appears to have opened a far wider and more complex conflict, effectively Pandora’s box has been opened, with Iran proving far more resilient and dangerous than many assumed.
When markets are forced to “re-price reality,” the first phase is not always logical. It is liquidity-driven.
In the first phase of crisis leverage gets cut, margin calls cascade, funds raise cash, weak hands sell whatever they can, and the rush into the US$.
That includes metals, even if the long-term fundamentals are extremely bullish.
2) Higher Oil = Recession Shock
Oil and refined fuel prices exploding higher are not just an “inflation story.” They are also a growth shock.
Energy is a base cost for everything. When energy spikes, it compresses margins, crushes consumption, and weakens already fragile economies. So recession probabilities rise.
This is why, in the early stage of an energy shock, markets often behave as follows:
Oil rises (scarcity / risk premium), Gold holds / churns (safe-haven vs liquidation pressure), Silver falls harder (it is higher beta, and gets sold first in de-risking).
3) The True Red Flag Is Private Credit
The most important development now is not the daily metal price fluctuation.
It’s the deterioration in the private credit market — a major red-flag event.
We are seeing reports of large managers restricting withdrawals / redemptions, including names such as BlackRock, Blackstone, Morgan Stanley-related vehicles, and Blue Owl, JP Morgan etc.. in products exposed to higher-risk lending.
Why does this matter?
Because private credit has become the shadow banking system, and it grew rapidly as global rates were pushed to zero and investors desperately chased yield further out the risk curve.
A critical point many investors miss:
A large portion of private credit lending has been extended to businesses that are already structurally weak. Some estimates suggest a very large percentage of over 40% of these borrowers have negative cash flows, meaning they survive only by refinancing and rolling debt forward.
That model breaks the moment rates rise, liquidity tightens, growth slows, and refinancing windows close.
And that is exactly the backdrop forming now.
4) What Is Private Equity vs Private Credit?
Private equity is essentially ownership: investors buy stakes in non-public companies and try to improve operations, then exit later at higher valuations. It has grown into roughly a ~ $9 trillion industry.
Private credit is essentially lending: private funds lend directly to companies (often private-equity-owned), outside the public bond market, typically at higher yields but with limited liquidity. It has expanded to roughly ~ $2.5 trillion.
In short, Private equity = ownership. Private credit = lending. Both are deeply linked, and both depend on liquidity staying available.
5) Why Gold Isn’t “Exploding” Yet
Because we are still in the “liquidity phase.”
COMEX silver in particular is increasingly thin, volumes are falling, participation is weak, open interest remains depressed at near 20 year lows, suggesting paper markets are running on vapour.
When fear spikes and leverage is being cut, liquidity tends to rush into the US dollar first, and we see that reflected in the rising trade-weighted dollar.
Only after the initial panic phase passes does the market rotate into the deeper, more rational trade: inflation persistence, currency debasement, declining confidence in sovereign balance sheets, and hard assets repricing higher.
6) The Next Phase: Inflation + Stagnation = Policy Trap
Strategic SPDR oil reserve releases are optics. They do not fix structural shortfall, and they do not reopen shipping lanes.
Analysts are now waking up to the likelihood of higher oil for longer, and the consequences are severe: inflation stays elevated, growth weakens, rate-cut hopes become unstable, and bond yields can spike again.
We are already seeing that stress show up in sovereign yields at the worst possible time, when economies are stagnating.
This is the nightmare combination: stagflation with extreme debt and leverage overhang.
And this is where the fiat monetary system has long shown its cracks.
As the Austrian economists remind us, it is not the oil shock alone that creates sustained inflation, it is the credit expansion required to pay for it.
In other words: the response to the shock is the inflation driver.
If growth weakens and credit markets deteriorate, central banks will be forced back toward balance sheet expansion and liquidity support, because the system cannot tolerate a genuine clearing event.
That is when the long-term precious metals thesis reasserts itself with force.
Bottom Line
Gold not exploding on day one of a war does not disprove the thesis.
It simply tells you we are still in the liquidation and dollar-liquidity phase.
But as oil stays higher, growth weakens, and credit markets crack, particularly private credit, the next phase becomes increasingly clear:
higher inflation, higher yields, equity bubbles deflating, and currency debasement returning as the only policy outlet.
And that combination is historically the environment where precious metals ultimately reprice, violently.
The global supply–demand deficits across these metals (such as silver and platinum) are simply the icing on the cake.
The cake being far bigger of course: a generational asset-class rotation driven by the most extreme global debt and leverage super-cycle, and with it, an escalating insolvency and debt-serviceability crisis.
That is why monetary debasement is not a choice anymore, it is the only pressure valve left.
And yes: debt does matter.
Silver will ebb and flow alongside the gold price as capital moves through the cycle, but the end game is not complicated.
The direction of travel is increasingly obvious.