Gold exports were largely responsible for the surge in exports. Lower pharmaceutical imports also helped the trade deficit shrink. The February trade deficit is also anticipated to shrink due to booming U.S. exports of LNG, , and refined products.
Goldman Sachs warned that peak crude oil prices of $150 per barrel (up from its previous target of $120 per barrel earlier this week) are possible as the conflict persists. In the meantime, -related fertilizer prices have soared, so higher food prices as well as an impending fear of possible food shortages are anticipated in the upcoming months due to the shipping problems through the Strait of Hormuz.
Clearly, the key to getting crude oil prices to subside is to reopen the Strait of Hormuz after Iran’s missile and drone facilities are destroyed. The Wall Street Journal reported on Friday that India is in active talks with Iran to allow at least 23 tankers through the strait, with the first crossings expected by the weekend. Furthermore, the U.S. has removed all sanctions on Russian crude oil to help India and other nations.
The U.S. dollar remains super strong and that should help U.S. financial markets be much more resilient. Since is priced in U.S. dollars, I am expecting gold to reemerge as an oasis for nervous investors.
