by Ivan Martchev
February 3, 2026
The stock market is concerned about war in Iran – and this concern is not limited to stocks. Crude oil, the most important global commodity, rose 7.65% last week, capping a move of over 10% in two-weeks.
The cause for this concern is obvious in this map. About 20% of global oil supply passes through the Strait on a daily basis, which is quite meaningful. The Strait of Hormuz is the global choke-point in any military conflict with Iran, and the Iranians surely have a strategy to utilize this geographical leverage.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
I am sure the Trump administration has some type of Venezuela-like strategy for regime change, which arguably was very cleverly executed with the ouster of Maduro, but the Iranians are likely to put up a much bigger fight, or so it seems. To be honest, I am not sure how one executes a regime change strategy without U.S. boots on the ground. The Venezuelans are playing along, as they have no other good option, but any heavy bombardment of Iran is unlikely to generate any meaningful kind of cooperation there.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Crude oil made it to $78.40 in June last year, when Iran and Israel had their conflict, in which the U.S. intervened. If not quickly executed, an Iranian regime change scenario lingering too long would cause oil to go a lot higher. The price depends on whether or not the Strait of Hormuz is used as a global choke-hold, which I suspect it would be. Such considerations have been the reason why the first peak above 7000 of the S&P 500 last week was met with selling into strength from Wednesday through Friday.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The S&P 500 trading above 6,900 so far has been used as an opportunity to unload positions, so right now this big consolidation process (since October) is starting to look more and more like selling into strength.
Mind you, a bigger correction is contingent on an Iranian confrontation getting drawn out and the oil price spiking, which has not happened yet, and I have no way of knowing whether it will happen. If it were not for Iran, the market would be appreciating, as earnings are rising and the economy is in good shape.
A likely scenario is an Iranian confrontation fueling a deeper correction, similar to the Tariff Tantrum last year, and we may see a huge rally afterward, because of good earnings and good economic performance, similar to what happened last year. How far can a bigger correction go during an Iranian confrontation?
One answer will emerge from the price of oil.
A good indicator of a bigger correction has started would be if in February the S&P 500 trades below the January low of just under 6800. A good target for a correction in an Iranian confrontation is the 200-day moving average near 6400. Those are hypothetical and likely won’t happen without Iran getting into the picture. But why would the Navy move an aircraft carrier into firing-range if no one intends to use it?
Precious Metals May Have Reached a Climactic Top
I think we hit an intermediate-term top in precious metals. We are likely to see a 3 to 6-month consolidation range with the swing quite big (low to high). Silver bullion, which typically lags gold and then goes parabolic in the latter stages of a bull move, is likely headed to $50, where it was as of last November.
Gold and silver are commodities, not operating companies. Sure, they can have shortages and explosive moves, like silver quadrupling in a year – if one was brave enough to sell silver in the $115-region, which few did – and then they tend to revert to the mean. Last week is what reversion to the mean looks like.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Because of this huge move in two-trading days, I would expect some kind of rebound. Silver is likely to make a lower high and trend lower, below $77.73. This is not a long-term bearish forecast but a realistic view of what intermediate-term corrections-consolidation periods in precious metals look like.
Of the four major precious metals – gold, silver platinum and palladium – only gold is truly precious. The others are primarily industrial, with their precious metal role a secondary consideration. Silver is smallest by value and, as such, is prone to dramatic moves in either direction as it is easier to move, which makes it the proverbial double-edged sword for the bulls. Right now, they are experiencing the bearish edge.
In a perverse way, the Ukraine war lit a fire under the gold price as sanctions immobilized a huge chunk of Russian central bank assets. Other central banks seeing the move clearly concluded holding gold bullion was “safer” and followed the Bank of Russia putting a floor under the price of gold bullion.
Both platinum and palladium have also shown bull markets but no parabolic moves. I think the crux of any bearish activity will be concentrated on the silver market simply because it quadrupled in a year. A simple mean reversion to the rising 200-day moving average means silver retreating to $50.
The 200-day moving average on gold bullion is at 3,775 and rising, so the downside in gold-bullion will not be as large as it will be with silver, as gold is a much larger and more liquid market.
In a perverse way, the Ukraine war lit a fire under the gold price as sanctions immobilized a huge chunk of Russian central bank assets. Other central banks seeing the move clearly concluded holding gold bullion was “safer” and followed the Bank of Russia putting a floor under the price of gold bullion.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The most recent long-term chart I can find shows gold as of early 2025 crossing over $3,000. Last week’s climactic high was a tad over $5,600. Clearly the Russians decided to play their cards close to the vest and doubled their reserves while gold prices were still in the mid $1,000s.
This has to be one of the more brilliant central bank trades so far this century.
Because gold has global central bank support, I do not believe gold bullion will decline below $4,000 on this correction, which is normal if you study corrections in gold bullion over the years.
Silver, though, is another matter. There simply isn’t any central bank support there.
All content above represents the opinion of Ivan Martchev of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Is Inflation Returning – or is Deflation a Greater Threat?
Income Mail by Bryan Perry
Kevin Hassett’s Base Case for an Economic Supply Shock
Growth Mail by Gary Alexander
What’s Behind the Surge (then Collapse) in Gold and Silver?
Global Mail by Ivan Martchev
The Stock Market is Worried about Iran
Sector Spotlight by Jason Bodner
What A Stock Market Rotation Looks Like
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Ivan Martchev
INVESTMENT STRATEGIST
Ivan Martchev is an investment strategist with Navellier. Previously, Ivan served as editorial director at InvestorPlace Media. Ivan was editor of Louis Rukeyser’s Mutual Funds and associate editor of Personal Finance. Ivan is also co-author of The Silk Road to Riches (Financial Times Press). The book provided analysis of geopolitical issues and investment strategy in natural resources and emerging markets with an emphasis on Asia. The book also correctly predicted the collapse in the U.S. real estate market, the rise of precious metals, and the resulting increased investor interest in emerging markets. Ivan’s commentaries have been published by MSNBC, The Motley Fool, MarketWatch, and others. All content of “Global Mail” represents the opinion of Ivan Martchev
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