Iran was never the main target

The Strait is apparently due to re-open soon.

And a deal could be signed on Friday.

~600 ships stuck in the Strait could soon be moving:

Source: Bloomberg

It will take months for all the crinkles in the global supply chain to smooth out.

As always in these types of high-wire geopolitical acts, take everything with a grain of salt.

But what I’m looking for NEXT is some type of conclusion for the Ukraine war.

So let’s rewind a touch…

In March of this year, just as things were kicking off in Iran I said the following:

“Venezuela wasn’t about Maduro, it was about Iran. And Iran is not about the Ayatollah, it’s about Ukraine. And Ukraine isn’t about Putin, it’s about China.”

I concluded that a deal to the end the Ukraine war was more likely than people thought.

A deal in Ukraine, and the lifting of sanctions on Russian oil would have major positive ripple effects across the global economy.

Consider this chart below:

Source: Bloomberg

[Click to open in a new window]

The US is trying to squeeze China, that’s always been the play.

Amongst all of this, the forgotten war…

I read the battlefield reports from the Ukraine war most mornings.

My overall take from that research indicates that Ukraine’s defence is holding up remarkably well after some potentially disastrous patches early in the war.

A large part of that is their advanced drone technology.

Meanwhile the Russian economy is starting to really creak under the pressure of sustaining the war effort.

If the big Donald in the White House can just offer an off ramp that will allow Putin to declare some form of victory, we could see a resolution to the conflict.

I know that sounds hard to believe.

But consider the possibility.

So what’s next for the ASX?

Your watchlists are probably solidly green today, as the local market lapped up the news.

Including many resource companies.

Ultimately, the commodity beast should carry many ASX small cap and micro-cap resource companies with it.

Right now, I’m quite focussed on gold and how it can perform in the second half of the year.

The gold price reacted positively to the news and really started to move, along with silver, in the second half of trading today.

So it might be worth, dusting off your knowledge of small gold plays in the coming weeks.

And if you’ve ever wanted to understand the core ideas of how gold investing works – be sure to read this book, by Fat Tail’s Brain Chu.