Silver (XAG/USD) trades with a mildly positive tone near $59.50 per troy ounce on Tuesday, up 2% for the day, but falling from recent highs and leaving the metal locked in a tight range.
Fading geopolitical tension weighs on safe-haven demand, while a softer United States (US) labor market reading limits the downside by keeping the Federal Reserve (Fed) outlook uncertain
Al Arabiya reported that an announcement regarding the reopening of the Strait of Hormuz is expected soon. Al Hadath suggested arrangements for a full reopening could be confirmed within hours. None of the reports have been officially verified, but they have already triggered a sharp unwind of the risk premium built into commodity markets during the conflict.
For Silver, the impact cuts both ways. The metal has benefited from defensive flows during the escalation, and a confirmed reopening of the waterway would remove that support. At the same time, cheaper energy and improved global trade conditions favor industrial activity.