Hormuz Crisis Shifts Risk-Off, Dragging Equities and Silver Down

The Hormuz crisis has shifted from an oil-and-bond story to a broader risk-off scenario, impacting equities, Copper, and Silver. The recent US-Iran confrontation has led to increased tensions, with Tehran setting conditions for reopening the Strait of Hormuz, and Washington hardening its rhetoric.

Brent oil prices have extended their advance toward $92, while the US 30-year yield has reached approximately 5.33%, its highest in 19 years. This global move gives the current shock a stagflationary character, threatening higher oil and freight costs, elevated inflation expectations, and reduced room for central banks to ease policy.

Silver's reaction is particularly notable, as it sits between two worlds, benefiting from monetary uncertainty and inflation concerns, while also depending heavily on industrial demand and risk appetite. The current environment is turning Silver's dual identity into a disadvantage, with Copper's weakness serving as a warning sign for its own performance.