Real Economic Shock From War Is Still Coming | Dr. Mark Thornton

Dr. Mark Thornton argues the Persian Gulf conflict could still deliver a delayed inflation shock through higher oil prices, with the Strait of Hormuz as the key supply risk. His base case is that energy disruption will ripple into food and manufacturing costs, keeping headline inflation sticky and reducing the odds of the Fed cutting rates as expected. For precious metals, the key takeaway is that Thornton sees a macro setup that is normally supportive for gold and silver: higher inflation, lower real-rate optimism, and policy uncertainty. He also flags that gold and silver have been behaving "unexpectedly" during the conflict, implying the market may not yet be fully pricing the second-round effects of an energy shock. Near term, the tradeable question is whether oil-driven inflation expectations force a repricing of Fed easing and re-anchor gold higher on lower real yields, or whether the market continues to discount the war premium. Watch energy markets, CPI expectations, and any shift in Fed guidance for the next leg in bullion. The interview is more macro commentary than hard market data, but it is relevant to metals desks because the transmission mechanism runs directly through rates, inflation, and safe-haven demand.