Alexander Campbell
· Campbell Ramble
· March 03, 2026 at 17:32
· ⏱ 9 min read
| Read on Substack ↗
Summary
The Israel-Iran-Saudi conflict escalation has triggered a broad risk-off 'de-risking event' — oil and dollar rally while equities, gold, silver, and copper sell off. The author argues this is a 'regret trade' as investors belatedly price in a sustained regional war, and sees opportunities in long oil (curve backwardation) and European gas, while warning that gold and bonds may suffer from liquidity crunches similar to 2008/COVID.
•Iran's attacks on Saudi and Gulf states have accelerated the normalization they sought to prevent, giving Saudi a security rationale to deepen ties with Israel and the West.
•Oil production and transportation are slowing as Gulf states prepare for direct conflict with Iran.
•The market exhibited a classic 'scramble for liquidity': oil and dollar up, stocks down, gold and silver down, with US crude futures for Dec 2027 actually declining (pricing a temporary disruption).
•The author's personal positions: long gold via call options (caught too long), short silver via curve trade, trimmed copper leg, and bought a small amount of bonds as a test trade.
•Bonds fell despite 'flight to quality' because rising breakeven inflation from oil and a Fed not inclined to lower real yields suppressed demand.
•The 'dollar is dead' narrative is contradicted by a strong dollar rally, reinforcing that the world still operates in a dollar framework.