Silver and Gold Jump with Stocks on 'Fragile Pause' in US-Iran War

GOLD and SILVER jumped to 3-week highs in London trade Wednesday as crude oil sank with interest-rate expectations following the USA and Iran agreeing to a 2-week ceasefire brokered by Pakistan.

Global stock markets also soared as tanker traffic began moving through the Strait of Hormuz.

But stocks and bullion then trimmed their gains as Bahrain, Kuwait, Saudi Arabia and the UAE all reported continued air attacks from Iran, while airstrikes by Israel "killed and injured hundreds of people" in Beirut according to the government of Lebanon.

"[This] fragile pause [is] shaped by economic pressure rather than diplomatic convergence, leaving markets exposed to a rapid return of instability," says analyst Michelle Brouhard at commodities-and-trade data specialists Kpler.

"Gold is not behaving like a typical safe-haven asset, also in times of de-escalation," says Carsten Fritsch at German financial group Commerzbank.

Silver prices touched $77.65 per Troy ounce in London Wednesday lunchtime, up 6.4% from before US President Trump announced the ceasefire with only an hour to spare before his previous deadline for "killing" Iran's "civilization".

Gold meantime jumped 3.3% to $4855 before also dropping back, losing $100 per ounce mid-afternoon as silver retreated to $75.

While gold and silver touched 3-week highs on Wednesday, market-based forecasts for where the US Federal Reserve will set its key interest rate at the end of this year fell to a 3-week low according to data from derivatives exchange the CME.

"The sharp fall in oil prices is leading to a easing of inflation risks," says Fritsch at Commerzbank.

"[That's created] a fall in bond yields from which gold, as a non-interest-bearing investment, benefits. Whether this remains the case depends on whether a lasting peace settlement is found in the coming two weeks or whether there is a renewed escalation thereafter."

So-called Dated Brent crude oil − a price for physical delivery of the European benchmark − yesterday topped a new all-time high above $144 per barrel ahead of Trump's deadline for devastating Iran unless it re-opened the Strait of Hormuz.

Today then saw Brent crude futures hit 4-week lows of $90 per barrel, down almost $20 for the day, before rallying above $94 as Iran's apparent ceasefire breaches made headlines.

Ten-year bond yields had earlier dropped to 3-week lows for Japan, the US and European government.

Shanghai's CSI300 stock index today jumped by 3.5% while Tokyo's Nikkei added 5.3%, but the EuroStoxx 600 trimmed an early jump of 4.4% to 3.8% as New York's S&P500 cut half a percentage point from its opening 2.5% gain.

"Nobody makes a better deal than President Trump," said US Secretary of War Pete Hegseth at a press conference today after the Commander-in-Chief declared the ceasefire to mark "A big day for World Peace!"