Oil Just Made Its Most Explosive Move in Years — Here’s What Usually Follows

Israel-Iran War Could Push Oil Even Higher, Reigniting Inflation

The escalation between Israel and Iran has set off alarms across financial markets. A further escalation risks disrupting flows through the Strait of Hormuz, through which nearly 25% of global Oil and 20% of LNG shipments pass.

Crude Oil prices have already jumped more than 40% in just two months – and JPMorgan warns Brent could spike to $130 a barrel in a worst-case scenario.

According to analysts at GSC Commodity Intelligence – “such as scenario would send inflation roaring back, potentially above 5% in the second half of 2025”.

The Fed May Be Forced to Stay on the Sidelines

There is no denying that the Federal Reserve is stuck. After months of signaling rate cuts in the second half of the year, the surge in Oil prices threatens to derail the plan.

A renewed Oil shock could have profound macroeconomic consequences. “If crude breaches and holds above the $100 mark, we could see U.S inflation reaccelerate towards 5%,” according to Phil Carr, Head of Trading at GSC Commodity Intelligence.

Higher energy costs would ripple across supply chains, forcing the Fed to shelve plans for their long-awaited first rate cut of 2025.

Fed policy makers certainly have good reason to proceed with caution. As borrowing costs remain elevated and corporate margins shrink, the risk of Stagflation – slow growth with high inflation – is once again creeping back into the narrative.

Stagflation: The Worst of Both Worlds

The re-emergence of high inflation paired with stagnant growth would trap monetary policymakers and hammer risk assets like Equities. RBC Capital Markets recently warned that global stock markets could drop 20% in a stagflationary environment.

Traders Hedge With Gold as Safe Haven Demand Surges

Amid the macro uncertainty, one asset class is stealing the spotlight: Gold.

Last week, Gold surged past $3,450 an ounce, moving within 2% of its all-time record high. Year-to-date, the world’s favorite precious metal has climbed over 30%.

More importantly, Gold has just achieved a historic monetary milestone – overtaking the Euro as the world’s second-largest global reserve currency.

This shift is more than symbolic. It reflects deepening concerns among central banks about the long-term credibility of fiat currencies. From China to the Middle East, central banks are rapidly rotating into hard assets – and gold is leading the charge.

Silver and Platinum Could Surpass Gold as The Best-Performing Assets of 2025

While Gold has dominated headlines in recent months, Silver and Platinum may deliver the real fireworks in the second half of 2025.

Even though Silver has gained more than 50% this year – recently touching a 13-year high and Platinum is up over 44% in just eight weeks – its fastest rally since 2008.

Both precious metals still remain deeply undervalued relative to Gold. As GSC’s Phil Carr puts it: “Silver and Platinum breakout moves, suggests that this rally is just getting started”.

The Time to Position Is Now

From Oil shocks and geopolitical risk to fiat devaluation and central bank hesitation – the second half of 2025 is shaping up to be a perfect storm for Commodity bulls.

The message is clear: if you missed the first wave of the rally – don’t miss what comes next!