Silver continues to see a lot of volatility, as rates are still elevated, and the headlines continue to be noisy to say the least.
Silver
Silver continues to be very noisy, but negative during the trading session on Tuesday as we are approaching a potential deadline for the Iranians to open up the Strait of Hormuz. According to the United States President, bombing of the infrastructure, the energy infrastructure, will commence after 8:00 tonight New York time if the Strait of Hormuz is not reopened.
This of course has the markets very nervous, but on my chart, I now have the 10-year yield in the bottom pane because there is a clear line in the sand at the 4.30% level that I think a lot of people will be watching.
This market will remain glued to the 4.30% level on the chart because, quite frankly, once we get below there it becomes more risk-on, and once we get above it it becomes more risk-off.
Impact of Non-Yielding Assets
Higher yields are particularly damaging for a market like silver, which is a non-yielding asset, and as a result, it is important to watch. This is a level that I have noticed for some time. It can change depending on the situation. It is possible that maybe some time down the road it will be 3.8%. We just do not know. But right now, it is 4.3% that people are watching.
The $70 level is an area of potential support, although to be honest with you, I think we have an environment where it is just going to be tough to hang on to it cleanly.
We are in consolidation and simply holding our breath to find out what happens next in Iran. Everything right now is about the Strait of Hormuz and what is going on between the Americans, the Israelis, and the Iranians.