A sharp sell-off in crude oil sent inflation expectations tumbling on Tuesday, igniting a powerful rally in precious metals that pushed spot silver to the doorstep of the psychologically important $60 an ounce mark. U.S. equities powered to fresh all-time highs while Treasury yields retreated, offering a dual tailwind for silver and gold.
West Texas Intermediate crude for delivery on the New York Mercantile Exchange plunged 5.7% to settle at $75.77 a barrel, and Brent crude dropped 5.3% to $79.36. The slide was triggered by signs of progress in U.S.-Qatari talks over a mechanism to improve traffic through the Strait of Hormuz. Even though no final agreement was reached and shipping disruptions have yet to normalize, traders aggressively unwound bets on a near-term supply shock. The collapse in energy costs swiftly eased marginal inflation pressures, lifting government bonds and driving the yield on the benchmark 10-year Treasury note down to around 4.6%, with the two-year yield near 4.20%.
Receding inflation fears immediately diluted the urgency for further Federal Reserve tightening. Last week the Federal Open Market Committee voted 9-to-3 to hold the federal funds target range at 3.50% to 3.75%. Chair Kevin Warsh signaled at his press conference that the central bank was content to let financial markets price the degree of restraint, offering no detailed rate path. Subsequent data showed the ISM manufacturing index climbing to 55.6 in July from 53.3 in June, keeping the growth-and-inflation trade alive, while the JOLTS report revealed job openings little changed at 7.4 million with an openings rate of 4.4% — just enough labor-market softness to support bonds. With oil in free fall, short-rate pricing that had leaned toward additional hikes softened materially, and expectations for a multi-increase scenario faded.
That environment opened the door for non-yielding assets. Spot silver jumped 2.39% to $59.45 an ounce, closing in on the $60 threshold, while spot gold added 0.57% to $4,077.70. When inflation expectations and nominal yields stabilize or decline, the opportunity cost of holding precious metals falls, rotating capital into stores of value such as silver. The metal’s unique industrial role — particularly as a key component in photovoltaic cells — provided extra resilience. From a technical perspective, silver has built clear support around $58; a decisive break above $60 could trigger follow-through buying.
A longer-term perspective tempers the excitement. Since 1921, silver has underperformed the S&P 500 by roughly 96%, making it less a vehicle for quick gains than a relatively stable asset for preserving purchasing power. Still, the metal has surged more than 150% over the past year. Its approach toward $60 reflects not only easing inflation fears and the associated monetary bid, but also robust industrial demand from sectors such as renewable energy. Oil prices, interest-rate expectations and macroeconomic data remain the critical forces shaping the next move in silver.