Will Iran attempt to throttle the 17 million barrels of oil that come through the Persian Gulf each day? If so, energy traders have been acting so far as though a blockade affecting a third of the world's seaborne supply is possible but not likely. Even though April crude surged sharply yesterday, its intraday peak failed by eight cents to breach a 62.37 Hidden Pivot target we'd been using as a minimum short-term price objective. April Gold similarly failed by a small margin to break above a bullish threshold at 667.60 that we've been monitoring closely. We should view both of these numbers as 'fail-safe' limits, since, once they've been exceeded, both crude and bullion will be off to the races. There has been much speculation about whether a war with Iran is coming. The nuttiest prediction so far was headlined 'War in 30 Days!' at a Web site known as much for its virulently anti-Israel views as for its coverage of the precious-metals sector. We strongly suspect the prediction arose not from any genuine certitude about an impending war, but rather from the author's desire to vent his well-documented, deep hatred of Israel in an editorially permissible way. (Click on map to enlarge) While the author expressed (feigned?) absolute confidence that Israel would launch such an attack, I can tell you for a fact he was not so confident that he was willing to bet $500 on it. The prediction was preposterous for a dozen reasons, including the obvious fact that, even if it were tactically advantageous ' an assumption open to dispute, given Iran's recent acquisition of state-of-the-art defensive hardware from the Russians -- Israel could never launch a war against Iran without the approval of the U.S. Moreover, were war with Iran to become unavoidable, the U.S.
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