Oil Surges Past $100 as CPI Data and Middle East Tensions Pressure the Fed

Tim Elliott (0:00)

It's the Morning Drive, Gold and Precious Metals. Now, here we are, it's Friday morning. Time for the weekly tapestry for gold and silver and other precious metals. See what I did there, Jeff.

The Bayeux tapestry is now on display in London, and I thought I'll link it to... Wasn't great, was it? I think I need to work a bit harder on my introductions. Nice to see you, Jeff Rhodes is back.

Jeff Rhodes (0:24)

Good morning.

Tim Elliott (0:25)

Morning to you. So, 9-11 today, you just said to me where were you? 9-11 was obviously a seismic event, and it's one of those things where you look back and you think, where was I on that day? And I remember exactly where I was. I had been at a press conference in Abu Dhabi. I had only been back here for a year or so, and we were driving back, and a journalist friend of mine who worked for Middle East Economic Digest sent a text as we were driving back, if you heard about this. And of course, we hadn't. We were just driving back.

And then you started getting more and more information, and we called him, and he was like, no, this is what's going on. And then the weird thing was the streets were so quiet because everybody went home thinking, oh, the world's, as though the world was on fire kind of thing. And everybody went and watched TV and watched the events on TV.

Jeff Rhodes (1:25)

Yeah.

Tim Elliott (1:26)

Where were you?

Jeff Rhodes (1:27)

Well, I had just previously taken Standard Bank from our original home, which was in Bank Street, Khalid Bin Al-Waleed Street.

Tim Elliott (1:39)

Okay.

Jeff Rhodes (1:39)

I'd opened the branch there because that was called Bank Street, and why wouldn't you? So, but by this time, we'd moved into Emirates Towers. And of course, we had the Twin Towers, we had the hotel and the office block. Right.

And there we were, me and myself and the colleagues at Standard Bank. And obviously, we had TVs because we were following markets 24-7. And there we were in a Twin Tower, watching the events unfold. I can tell you, it was scary. For us, it was, we're looking at it and thinking, wow, what have we done?

And it was scary, I must say. And one of the, I've been here nearly 30 years, one of the big events, when you look back on those 30 years, what were some of the key events? And 9-11 really was significant.

Tim Elliott (2:53)

It was, no, it really does stand out. And the whole chain of events that ensued from that as well. So it did change the world, didn't it?

But obviously, honoring the people that died today in the US.

Jeff Rhodes (3:07)

But did you know something, Tim?

In the, I think, basement number 5, in the Twin Towers was one of the biggest gold vaults, certainly in the US., maybe even in the world, in one of the Twin Towers. And obviously, tremendous amount of damage done. But the gold was untouched. The gold was untouched. I had a feeling you were going to say that. Yeah, it was one of those things where, you know, its gold is indestructible.

Tim Elliott (3:44)

Yeah.

Jeff Rhodes (3:45)

And again, it was a very sad event, but it proved its indestructibility. And yeah, I do, one of those things that stay with you forever. So 9-11 comes along and you feel as though you should be recognizing it actually.

Tim Elliott (4:05)

No, quite right. It's just one of those moments in time, isn't it?

Jeff Rhodes (4:09)

It is.

Tim Elliott (4:09)

Or certainly in our lifetimes, of course. Let's start with gold. We had, let me just check my figures, $4,442 on Wednesday.

That's where gold firmed at. Then renewed attacks between the US and Iran, incoming inflation data, focus on the interest rate outlook. What's caught your attention?

Jeff Rhodes (4:35)

Well, oil price is back above $100. I think that's the key influence in terms of inflation. Energy globally is a key aspect of inflation and interest rates.

And it looks as though we've got $100 for Brent for a while, certainly. And so whereas we had expected and perhaps hoped that we'd see $75, it's not the case. And the situation in the Gulf still continues. And while that continues, oil prices will continue in three figures. And if it does, that's quite bearish for gold. In as much, it could encourage the Fed next week to make a move on interest rates.

Tim Elliott (5:35)

Yeah, and we've got what figures today, the US producer prices, the US consumer price index.