Oil is driving everything and it is still too early to call a peak: Geoff Dennis
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As Asian markets showed early signs of recovery, Geoff Dennis, a widely followed independent emerging markets commentator, cautioned investors against reading too much into the bounce. Speaking to ET Now, Dennis said crude oil has become the singular variable governing global asset prices — and until it stabilises, any equity rally remains fragile and conditional.
Brent crude has surged from around $60 just a few months ago to between $84 and $85, including a near 18% jump in a single week as the West Asia conflict escalated. Dennis noted that the Strait of Hormuz is effectively closed, NATO has been drawn into the situation following an attack on Turkish airspace, and an Iranian vessel has been sunk in the Indian Ocean. “It is still far too early to say that oil prices have settled down,” he said plainly.
“The price of oil is driving everything, frankly, now. If oil prices settle down, markets will recover — and recover quite nicely. But it is just too early to tell,” says Dennis.
Gold nearing its ceiling
Gold has climbed back above $5,000 per ounce — a level Dennis sees as reflecting its classic safe-haven role rather than signalling further upside. He argued that the broader commodity complex is not benefiting from higher oil prices, since expensive crude acts as a drag on global economic growth. For gold to push meaningfully higher from current levels, the Middle East situation would need to deteriorate materially further — a scenario Dennis considers possible but not his base case. “I tend to feel gold is topping out,” he said.
Emerging markets and tech: Signs of stabilisation
The MSCI Emerging Markets Index fell 9% in just four days, erasing most of EM’s outperformance against developed markets for the year — from over 1,100 basis points down to around 500. Dennis attributed the sell-off to a classic risk-off rotation: investors pulling back from higher-beta assets as the dollar strengthened and oil surged. Korea’s KOSPI, which had been a standout performer, was among the hardest hit — but its sharp rebound on the day of the interview was, for Dennis, an encouraging signal. Absent a major new escalation in the Middle East, he said tech stocks across the region look poised to attempt a recovery.
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