Gold and silver prices jumped Tuesday after the US and Iran reached an interim agreement to end hostilities and reopen the Strait of Hormuz. The breakthrough lifted precious metals as traders responded to reduced geopolitical tension in a critical oil shipping route. Markets had been pricing in supply disruptions amid ongoing Middle East tensions.

The Strait of Hormuz handles roughly one-third of global seaborne oil trade, making its status a major factor in energy markets. Any threat to this waterway typically sends crude prices higher, which then filters through to broader inflation pressures. The deal signals both sides are stepping back from military confrontation, at least temporarily.

Easing oil supply concerns helped push down inflation expectations, which directly impacts how markets price future interest-rate moves. Gold, which pays no yield, competes more favorably with bonds when rate hike fears recede. Silver often tracks gold moves but with added industrial demand exposure.

The metal rallies reflect market relief that a potential supply shock has been averted. Whether this translates into sustained gains depends on how fully the agreement is implemented and whether it leads to broader de-escalation in the region.