Hormuz Reopening Hopes May Support Silver Prices Temporarily
Oil price fluctuations are expected to impact silver prices in the short term. The Strait of Hormuz reopening has sparked optimism, causing oil prices to ease and potentially supporting silver briefly. Spot silver has been trading between $62.31 and $68.32 so far this month, with a daily loss of 1.1% at $63.70 due to rate hike concerns. However, the metal's decline is expected to be short-lived as it may find support at $65, followed by resistance at $66.05-$66.40.
The US and Iran are exploring a phased deal to open the Strait of Hormuz, which has been impacted by the ongoing conflict. This development has led to a surge in Saudi Arabia's oil exports, averaging 5.28 million barrels per day (mbpd) in September, the highest since the Iran war broke out. The US is also considering a 90-day ban on diesel exports, but this move could backfire and worsen the existing global diesel shortage.
The US Dollar Index has surged nearly 2% in September, while the average global yield on government bonds is within striking distance of its highest level since 2007. The 30-year US yields have reached 5.44%, their highest since 2004. Meanwhile, registered COMEX silver inventory has decreased by 52.45% from its record level last year.