Commodities Diverge: Gold and Silver Crash as Oil Rises on Hormuz Risks

The commodities market witnessed a sharp divergence as gold prices slid more than 3% and silver plunged over 10% amid a drastic souring of market sentiment. Conversely, oil prices climbed more than 2% due to rising concerns regarding prolonged supply disruptions in the Strait of Hormuz. Copper also continued its retreat from record highs, pressured by accelerating US inflation and a stronger US dollar.

The pressure on precious metals comes as US economic data showed unexpected resilience, with the Consumer Price Index (CPI) rising 0.4% month-on-month per market data on May 12, 2026. This acceleration in inflation has bolstered expectations for sustained high interest rates, driving Treasury yields and the dollar higher, which explains the aggressive sell-off in silver relative to gold's typical safe-haven stability.

Traders should closely monitor geopolitical developments in the Strait of Hormuz as a primary catalyst for continued oil price momentum. Looking ahead at the economic calendar, focus shifts to upcoming Fed speeches, including remarks from Williams on May 12, 2026, for further clues on monetary policy direction and its impact on gold's appeal as a non-yielding asset.