Gold & Silver Smash Records on Geopolitical Angst; Oil Plunges as Risk Premia Fade

XAU/USD and XAG/USD surged to unprecedented levels on Wednesday, driven by a potent mix of Broad Dollar weakness and escalating fears of conflict in the Middle East. However, energy markets decoupled from the safe-haven rally, with WTI Crude dropping sharply late in the session following de-escalatory rhetoric from the White House.

Precious Metals in Discovery Mode

Gold prices executed a sharp bullish reversal, ignoring steady Fed rate expectations to clear the psychological $4,600 barrier. The metal traded up 0.65% at $4,615, as investors sought safety amid reports of Iran placing military forces on “highest alert.”

Silver outperformed its yellow peer, skyrocketing over 7% to a new all-time high of $93.52. The white metal bounced aggressively off a daily low of $86.91, with technical analysts suggesting a test of $100.00 is now in sight in the near term.

Oil Volatility and Geopolitics

While metals rallied, the energy sector faced a sudden liquidation. WTI Crude fell 3%, approaching $59.00 per barrel, erasing earlier gains.

The sell-off was triggered by comments from US President Trump regarding the situation in Iran. Despite earlier threats of military intervention following riots in Iran, Trump stated from the White House that he would “wait and see how the situation develops,” citing “very positive statements” received from Tehran.

Market participants interpreted these remarks as a signal that immediate US military strikes are unlikely, prompting a rapid unwinding of the war risk premium that had supported oil prices earlier in the week.

Regional Diplomacy

The geopolitical landscape remains fragile. Iran remains on high alert, citing increased missile stockpiles. However, regional brokers including Saudi Arabia, Qatar, and Turkey are actively lobbying Washington to exercise restraint, fearing a broader conflict could destabilize the Strait of Hormuz. This diplomatic push appears to be partially subduing the immediate threat of supply disruptions, further weighing on crude prices.

Market Snapshot

• Gold (XAU/USD) clears $4,600 and gains 0.65% to trade at $4,615.
• Silver surges 7% to hit a record high of $93.52.
• WTI Crude falls 3% approaching $59.00 per barrel following de-escalation signals.

Technicals

• Silver rebound suggests a near-term test of the $100.00 resistance level.