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Dear Reader, 

In our Global Outlook 2026, we advised readers to be ready for surprises—both positive and negative. Recent years have shown that, even amid a complex macro and geopolitical backdrop, markets can deliver unex pected upside. We remain convinced investors should focus on fundamentals, maintain discipline, and avoid reacting emotionally to headlines. The first half of 2026 has provided further evidence of this. In this summer edition, we review three core surprises and their impli cations for investors for the rest of the year. 

OIL ALWAYS FINDS ITS WAY

The standstill in the Strait of Hormuz in March trig gered the largest oil price spike in decades, with many predicting prices above 150 dollars a barrel. Yet, as soon as a fragile détente was announced in June, oil prices collapsed, shifting from panic buying to panic selling. The reality is more nuanced. Oil continues to flow: some vessels escaped the Strait by going “dark” or taking routes near Oman. Additional capacity was used via pipelines such as Yanbu (Saudi Arabia) and Fujairah (UAE). Increased supply from the United Arab Emirates—after its exit from Organization of the Petroleum Exporting Countries (OPEC)—and Iraq’s willingness to export more will likely help reduce the deficit. On the demand side, significant demand destruction in China, supported by large reserves and a clear strategy to reduce fossil fuel dependence, means supply/demand dynamics are not as dramatic as feared. In summary: oil has not stopped flowing and continues to find new routes. As highlighted in our March edition, pipeline infrastructure is becoming a decisive geo political asset, reducing dependence on choke points like the Strait of Hormuz. 

THE CENTRAL BANKS’ DILEMMA

The surge in energy prices has posed a challenge for central banks. Can a rate hike control the impact of oil on prices? Probably not. Can a central bank gain credibility by hiking rates to ensure price stability? Certainly, but this creates a dilemma. The European Central Bank (ECB) chose to hike once—our view is that no further action is needed, though price stability remains its sole mandate. For the Federal Reserve (Fed), the story is different. The June inflation figure provided relief, as secondary effects from oil prices have so far been limited: all 67 economists surveyed by Bloomberg expected higher inflation yet were proven wrong. As a result, Kevin Warsh can maintain a hawkish tone—emphasising “no tolerance” for elevated inflation—without needing to raise rates. Notably, one-year inflation expectations dropped below 2% for the first time during Trump 2.0. While markets expect one or two hikes this year, we believe the Fed will remain on hold, and the bar for further tightening remains high. 

HAS GOLD LOST ITS SHINE? 

Perhaps the most unwelcome surprise this year has been the sharp reversal in gold prices, which fell from a high of 5,500 dollars to 4,000 dollars by early July. Has gold lost its diversification appeal? Our answer is no. The Middle East crisis prompted some central banks to sell gold to rebuild dollar reserves and support their currencies: Turkey and Russia sold 81 and 34 tonnes, respectively. However, a new wave of buying is emerging. While flows into Western gold ETFs were negative in the first half (-7.7 billion dollars), Asian gold ETF flows have been robust (+12 billion dollars). Although the People’s Bank of China (PBoC) reduced its gold purchases in 2025 as prices soared, it has resumed buying this year—June marked its strongest month in 20 months. We estimate China is on track to purchase over 100 tonnes this year, tripling last year’s numbers. This renewed demand should provide significant support to the market, as China appears increasingly sensitive to price in diversifying its reserves.

I wish you an enriching read and a pleasant summer break, while keeping in mind that this summer remains under close watch.

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_{Monthly House View, 01.08.2026. - Excerpt of the Editorial}