Silver rallies as cooling oil prices temper geopolitical risk

Spot gold climbed 0.57% to $4,077.70 an ounce, while silver surged 2.39% to reach $59.45. This movement occurred against a backdrop of record-setting equity sessions, with the S&P 500 and Nasdaq Composite posting gains of 1.8% and 2.6% respectively, driven by robust AI-related demand and firm corporate earnings.

Energy markets saw a significant sell-off as traders tempered expectations of a near-term supply shock. Brent crude slid 5.3% to $79.36, and Nymex WTI dropped 5.7% to $75.77. Although U.S. and Qatari officials continue to navigate discussions regarding shipping safety in the Strait of Hormuz, the lack of an immediate escalation allowed investors to rotate back into risk assets and Treasuries, effectively lowering the 10-year yield to near 4.62%.

Despite the market optimism, the Federal Reserve’s stance remains a defining uncertainty. Following a 9-3 vote to maintain the federal funds target range at 3.50% to 3.75%, Chair Kevin Warsh signaled a preference for allowing markets to price in a tighter monetary environment rather than relying on explicit forward guidance. Recent data, including a solid 55.6 reading in the ISM manufacturing index, keeps the inflation narrative active, though Tuesday’s JOLTS report showing 7.4 million job openings provided enough signs of labor-market cooling to cap further spikes in short-term rates.