The Pentagon instructed U.S. Central Command several days ago to prepare for the possible resumption of major combat operations against Iran, according to an Axios report citing U.S. officials. The headline helped push crude oil roughly 4% higher, while the U.S. dollar did not continue its recent upward trajectory. Against that backdrop, #Gold is slightly higher, while #Silver is down about 1%.

In the physical/derivatives market, the implied silver EFP on WatchGold.org fell about 4.5 cents from yesterday, with spot silver trading around $59.00. The implied gold EFP also moved lower, although it remains above comparable OTC levels. One-month ATM implied volatility was relatively unchanged from yesterday at approximately 20.3% for gold and 32.5% for silver, toward the lower end of recent ranges. It will be interesting to see whether this relative stability in volatility helps the precious metals market begin to establish a base. Longer-term sentiment toward precious metals remains broadly constructive, but there are still significant macro and geopolitical hurdles ahead. The U.S. midterm elections, developments in the Middle East, crude oil prices, U.S. interest rates and the dollar all remain important variables to watch. A resolution or meaningful de-escalation in the Middle East could reduce pressure on crude oil and inflation expectations, potentially creating a more favorable backdrop for U.S. rates and precious metals. The timing, however, remains highly uncertain.

For educational and informational purposes only. This commentary reflects market observations and opinions and is not investment advice or a recommendation to buy or sell any security, commodity or financial instrument