As tensions in the Middle East escalate, the financial markets are experiencing significant turbulence. Stocks and commodities are simultaneously taking a hit, signaling widespread investor anxiety. However, amidst the chaos, gold is defying the trend and has surged towards the $2,500 per ounce, reaching new all-time highs this week.

Silver, on the other hand, is lagging behind, which suggests that traders should exercise caution. If the situation in the Middle East de-escalates, we could see a relief selloff that might affect precious metals.

Adding to the complexity, new estimates from Bank of America indicate that the supply of T-bills could deplete reverse repos in about two months. This spare monetary tank has been lingering for most of the year. The repo rate also closed out July on a high note, while bank reserves are nearing the $3 trillion danger zone once again.

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