Gold prices climbed 1.84% to reach $3,945.80 an ounce, while silver gained 3.67% to settle near $50.800. This recovery followed a volatile period in global commodity markets, driven primarily by reports of potential diplomatic progress between Washington and Tehran. The prospect of a negotiated settlement regarding the Strait of Hormuz cooled energy prices, with Brent crude falling to $104.77 a barrel and Nymex WTI settling at $96.46.

Despite the relief in energy costs, the broader economic environment remains restrictive. U.S. manufacturing activity expanded for the 10th consecutive month, with the ISM index hitting 55.5, reinforcing expectations that the Federal Reserve may maintain its aggressive monetary stance. Treasury yields retreated toward 4.9%, offering further support to bullion. Markets are now pivoting toward the upcoming U.S. midterm elections and a series of labor market reports, which are expected to shape the trajectory of December interest rate decisions.