SPEAKER_01 0:00

Let's uh let's unpack a pretty massive paradox for you today. Because looking at Monday, July 20th, 2026, we have a really crazy divergence.

SPEAKER_00 0:10

Yeah, it's definitely a big one.

SPEAKER_01 0:12

Right. So on one side of the globe, war is escalating, and you know, crude oil prices are just absolutely skyrocketing.

SPEAKER_00 0:19

Skyrocketing, exactly.

SPEAKER_01 0:21

But the ultimate safe havens, they're basically falling out of bed.

SPEAKER_00 0:24

It completely goes against every textbook rule of trading out there. Normally, I mean, when geopolitical tension spikes, you'd expect capital to just instantly flee into gold and silver.

SPEAKER_01 0:34

Right, but instead they're plummeting. So today's deep dive is all about making sense of this. And we're sourcing today's insights straight from the pre-market briefing by Eli Levy at Canon Trading Company.

SPEAKER_00 0:44

And uh if you want to follow up on the specific data we cover today, you can actually reach Eli directly at Eli at Canon Trading.com.

SPEAKER_01 0:52

Exactly. But uh before we really get into the mechanics of this supply shock, we do need to cover a required disclosure for you.

SPEAKER_00 0:59

Disclaimer. Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

SPEAKER_01 1:28

Alright, so let's look at the catalyst here. I mean, Brent Crude surged 14% last week, hitting $90.

SPEAKER_00 1:34

Yeah, 14% is just massive.

SPEAKER_01 1:36

It really is. And this isn't just traders getting spooked by a rumor, right? It's like putting a literal physical kink in the world's main fuel hose at the Strait of Hormuz.

SPEAKER_00 1:46

Well, the physical supply shock is very real. I mean, we've seen seven nights of U.S. strikes on Iranian logistics.

SPEAKER_01 1:51

Wow, seven nights.

SPEAKER_00 1:52

Yeah, and Iran is aggressively returning fire across the Middle East. So because of this kinetic exchange, vessel crossings through the strait have actually plummeted to a three-week low.

SPEAKER_01 2:02

So the passage is practically impassable right now.

SPEAKER_00 2:04

Basically, yeah.

SPEAKER_01 2:05

Which means that pinched fuel line instantly bleeds into the domestic economy. This physical bottleneck immediately resuscitates this whole higher-for-longer rate environment.

SPEAKER_00 2:16

The data shows it so clearly. Domestic inflation was cooling, but now import prices have jumped 7.1% year over year.

SPEAKER_01 2:24

7.1%. That's a huge jump.

SPEAKER_00 2:26

It is. That oil spike is just shoving price pressure right back into global supply chains, you know, completely stalling our disinflationary progress.

SPEAKER_01 2:35

And the bond market reacted instantly to that.

SPEAKER_00 2:37

Oh, instantly. The 10-year treasury yield pushed straight to 4.5%.

SPEAKER_01 2:42

Wow.

SPEAKER_00 2:42

Yeah. And we even saw 30-year fixed mortgages hit 6.55%, peaking at levels we really haven't seen since last September.

SPEAKER_01 2:50

Okay, wait, hold on though. There is a literal war escalating in the Middle East right now.

SPEAKER_00 2:54

Uh huh.

SPEAKER_01 2:55

Everything I've ever learned says you buy gold when bombs start dropping.

SPEAKER_00 3:00

Right. That's the standard playbook.

SPEAKER_01 3:02

So how on earth is gold tanking right now? I mean, it broke below $4,000 and silver got hammered by over seven percent.

SPEAKER_00 3:09

I know, it's the ultimate paradox. But it actually makes total sense when you look at the underlying mechanics of yield.

SPEAKER_01 3:15

How so?

SPEAKER_00 3:16

Well, gold yields zero interest. Right. It just sits there. So when that inflation data hit and the 10-year treasury yield spiked to 4.55%, institutional investors looked at their portfolios.

SPEAKER_01 3:26

Right. They have to make a choice.

SPEAKER_00 3:28

Exactly. Do you hold a dormant metal during a crisis, or do you lock in a 4.5% risk-free return backed by the U.S. government?

SPEAKER_01 3:38

Ah, I see. So the capital just flies out of the zero yield safe haven and goes straight into the high yield safe haven.

SPEAKER_00 3:44

You got it. And that aggressive buying of U.S. yields drives up the value of the dollar.

SPEAKER_01 3:48

Makes sense.

SPEAKER_00 3:49

So the safe haven bid for metals was completely crushed by the sheer gravitational pull of hot import prices, a surging dollar, and those massive treasury yields.

SPEAKER_01 3:59

It really highlights how global rates sort of dictate the big macro trades. But then, you know, you look at local fundamentals, and they're operating in an entirely different universe.

SPEAKER_00 4:10

Oh, totally, completely decoupled.

SPEAKER_01 4:12

Yeah, like U.S. natural gas is basically acting like a walled garden right now. It's completely geographically insulated from all the shipping chaos.

SPEAKER_00 4:20

It's probably the cleanest example we have of local fundamentals just brushing off a global shock.

SPEAKER_01 4:26

Right. Because while Brent Crude is flying, U.S. natural gas actually dropped to a two-month low.

SPEAKER_00 4:32

Yeah, sitting right near $2.92.

SPEAKER_01 4:35

Which is wild.

SPEAKER_00 4:35

It is, but it's totally shielded by record domestic production.

SPEAKER_01 4:40

And we're seeing that divergence in agriculture too, aren't we?

SPEAKER_00 4:42

We are. I mean, soybeans managed to rally on fresh Chinese demand.

SPEAKER_01 4:46

Okay.

SPEAKER_00 4:46

But that same strong dollar we just talked about, it pushed softs like cotton and coffee lower, completely overriding the bad weather conditions we're seeing in Texas and Brazil.

SPEAKER_01 4:56

So kind of synthesizing all of this from Eli Levy's briefing, what's the real underlying psychology driving the markets today?

SPEAKER_00 5:03

Well, basically, the market is currently valuing the mathematical certainty of high interest rates over the geopolitical uncertainty of war.

SPEAKER_01 5:11

That's a great way to put it.

SPEAKER_00 5:12

Yeah, you're looking at a massive war premium in oil versus a strong dollar in almost everything else. The real lesson here is you have to trade the divergence that's actually in front of you.

SPEAKER_01 5:23

Right, rather than the textbook narrative you wish were true.

SPEAKER_00 5:26

Exactly.

SPEAKER_01 5:26

Well, that leaves you with a really fascinating question to chew on. If local natural gas can function as a walled garden and completely ignore a global oil shock today, just how long can local consumer prices ignore a completely closed global shipping lane tomorrow?

SPEAKER_00 5:43

Disclaimer. Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources, you may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.