Metals rally as Hormuz diplomacy cools oil markets

Spot gold climbed 0.62% to $4,300.00 an ounce, while silver surged 1.62% to $64.760. The shift follows reports of ongoing negotiations in New York aimed at de-escalating tensions between Washington and Tehran, potentially easing the supply-side risks that have dominated energy markets. Brent crude slipped to $105.26 a barrel, and WTI fell to $92.78, offering a slight reprieve from the inflationary pressures that recently pushed the 10-year Treasury yield toward 5.1%.

Despite the metals' bounce, market sentiment remains anchored to a restrictive monetary outlook. Stronger-than-anticipated U.S. economic data, including resilient housing figures and lower jobless claims, have led traders to price in a 71% probability of another 25-basis-point rate hike in October. While lower oil prices typically reduce the immediate inflation impulse, the broader rates channel continues to weigh on bullion. Investors are now looking toward final consumer sentiment data to determine if robust goods demand will grant the Federal Reserve further latitude to maintain its aggressive policy stance.