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Our top story of the week which just recently broke out is an explosive surge of violence in Iraq, where Sunni insurgents captured two key cities within the embattled country, and issuing a public vow to march forward to Baghdad. According to the Associated Press, fighters from the militant group known as the Islamic State of Iraq and the Levant took Saddam Hussein’s hometown of Tikrit on Wednesday as Iraqi soldiers and security forces abandoned their posts and yielded ground once controlled by U.S. troops.

On Tuesday, the insurgents managed to capture much of Mosul, Iraq’s second largest city. The situation has a high potential of unraveling uncontrollably, as the insurgency and its allies control Fallujah and other areas of the Sunni-dominated Anbar province to the west of Baghdad. A spokesman for the Islamic State of Iraq stated that the group intends to settle contentions held against Prime Minister Nouri al-Maliki, a Shiite leader attempting to maintain power after what was regarded as indecisive elections this past April.

This has obvious reverberations for the United States, with the White House revealing that they were “deeply concerned” with the Islamic State’s continued aggression. There is growing speculation by the mainstream media that American forces could be brought back into the fold two years after leaving Iraq. To unsettle matters further, the Islamic State has been distanced by al-Qaeda due to their excessive radicalism, according to a CNN broadcast.

In the commodities market, the price of crude oil jumped substantially in response to escalating tensions, moving up a percent and a half in the early hours of trading. The recent spike, which has edged the cost per barrel to $106 dollars, is in stark contrast to earlier optimism about lower gas prices this year, a sentiment which we reported on in our May 23rd broadcast. As we mentioned at the time, the greatest risk to this sentiment were geo-political factors that could ignite without warning, a circumstance in which we now find ourselves in.

Iraq is the second largest oil producer in OPEC behind Saudi Arabia, with a daily production of 3.3 million barrels. Investors are stating that they are not surprised with the price increase, with supply disruptions occurring in other oil producing regions. However, the veracity of the violence has many in the global financial markets worried. As of now, the insurgency has not affected the core oil production areas within Iraq, which lie in the south-eastern part of the country, according to CNBC. However, tensions could easily spill over, turning a tenuous equilibrium into a full-scale crisis.

As expected, equity markets started the day under pressure, with the S&P 500 eventually closing down seven-tenths of a percent, followed by the Dow Jones down six tenths of a percent. This marked the third consecutive day that the broad markets turned south, a condition which may accelerate should geo-political events become further destabilized. The metals complex, on the other hand, received a much needed boost, with gold bullion closing out the session above $1,270 and silver receiving a hearty lift to $19.50.

Palladium pulled back sharply, down nearly 4-and-a-half percent in response to a recent surge to $860 dollars. Digital currencies had a soft week, with bitcoin settling into a tight range around the $620 dollar mark after a failed attempt to clear 700.

And that will do it for this edition. Thanks for watching and we’ll see you next week!