War Premium Evaporates: Silver Crashes 7% as Trump Signals "Wait and See" on Iran

The geopolitical risk premium that propelled precious metals and energy to fresh highs unraveled violently on Thursday. Markets repriced the immediate threat of a broader Middle East conflict following comments from the White House, triggering a mass liquidation event in the commodities sector.

The “Wait and See” Sell-off

US President Trumps statement that he would “wait and see” regarding the situation in Iran—and his suggestion that military strikes were not imminent—removed the immediate fear bid from the market. The reaction was brutal:

• Spot Silver (XAG/USD): Plunged over 7% from historical highs of $93.68, breaking key technical support at the 20-period moving average.
• WTI Crude Oil: Dropped 3% to hover near $60/barrel as supply disruption fears eased and EIA inventories showed a significant build.
• Gold (XAU/USD): Retreated from the $4,600 region, entering a technical correction despite recent record highs.

Goldman's Extreme Sentiment Warning

The crash coincides with a warning from Goldman Sachs, whose internal “Risk Appetite Indicator” hit the 96th percentile—levels not seen since early 2025. Such extreme optimism often precedes market corrections. The sudden removal of the immediate war catalyst provided the perfect excuse for over-leveraged long positions to unwind.

Long-Term Bull Case Remains

Despite the flash crash, structural drivers for commodities remain valid. Global central banks continue to buy gold at a record pace to diversify away from US Treasuries. Furthermore, trade friction is escalating elsewhere; the US administration is threatening tariffs on EU trade deals over the Greenland dispute and slapping 25% tariffs on Nvidia/AMD chips manufactured abroad. While the “War Premium” has faded, the “Trade War Premium” and debt-monetization hedge demand are likely to limit the depth of the metal market's correction.