Precious metals are facing renewed selling pressure following a 3.7% CPI reading, driven in part by surging gasoline prices in September. Crude oil is up $1.25today, while silver has fallen more than 4% and gold is down approximately 1.6%. The combination of unresolved tensions involving Iran and the broader Middle East, a stronger U.S. dollar, elevated interest rates, and uncertainty surrounding the upcoming U.S. midterm elections continues to weigh heavily on precious metals. Silver is experiencing a particularly sharp correction, as London silver forward markets and liquidity conditions reflect relatively modest lease rates. One-month London OTC silver OTC rates are quoted at 3.95%–4.15% (implying a zero lease rate), while two-month OTC rates stand at 3.65%–4.10%. Meanwhile, LBMA silver vault holdings in London were recently reported at 932 million ounces, a 12-month high, suggesting improved physical silver availability and liquidity. It is worth remembering that silvers significant rally throughout 2025 and into January 2026 was driven, in part, by exceptionally tight physical liquidity. At the height of that squeeze, silver lease rates approached 30%, while OTC forward markets reflected backwardation of approximately 25%. Those extraordinary conditions contributed to the sharp rise in silver prices. Today, the liquidity picture is considerably different.

As I have emphasized for months, patience remains the most important discipline in this market. The long-term fundamentals supporting precious metals remain intact, in my view. However, the combination of negative geopolitical headlines, a stronger dollar, elevated U.S. interest rates, and broader macroeconomic uncertainty continues to create significant short-term headwinds.The key is distinguishing between short-term market pressure and long-term fundamentals. Improved liquidity may have reduced the urgency that fueled silvers earlier rally, but it does not necessarily undermine the longer-term outlook. For now, patience, perspective, and discipline remain essential. Strong fundamentals do not prevent sharp corrections, and timing remains one of the greatest challenges in precious metals markets. #Silver #Gold #PreciousMetals #Inflation #CPI #Commodities #LBMA #InterestRates

Disclaimer: For educational and informational purposes only. This commentary reflects market observations and personal opinions, not investment advice or a recommendation to buy, sell, or hold any asset. Market conditions and prices are subject to change.