NEW YORK, Sept. 26 -- The Strait of Hormuz has not reopened, but the possibility that it might is doing strange things to silver. On Thursday, US-Iran diplomatic talks on the sidelines of the United Nations General Assembly in New York lowered Brent crude by roughly $2 per barrel and trimmed October Federal Reserve hike odds from 70% to 67.5% - and XAG/USD barely moved. Silver is trading just below $64.00 per troy ounce, unable to mount a recovery against the highest Treasury yields since 2007 even as the geopolitical pressure that justified the September hike begins to ease.

XAG/USD settled near $63.85 on Wednesday before edging back toward $64.00 in Thursday's Asian and European sessions. The metal is tracking a weekly loss of approxim...