Gold and Silver Prices Update
On Wednesday, gold prices dipped slightly as investors held their breath for a potential rate cut from the U.S. Federal Reserve, while silver climbed to new heights.
As of 1113 GMT, spot gold had fallen by 0.4%, reaching $4,193.60 per ounce. Gold futures for February delivery decreased by 0.3% to $4,221.60 an ounce.
In contrast, spot silver increased by 0.7%, hitting $61.11 an ounce after earlier peaking at $61.61 due to growing industrial demand, dwindling inventories, and the U.S.’s critical mineral classification. This year, silver has surged by 112% so far.
According to Carsten Menke, an analyst at Julius Baer, “Silver broke through the $60/oz threshold, attracting more short-term speculators and trend followers, which highlights the physical tightness in the silver market.”
The Federal Open Market Committee is wrapping up a two-day policy meeting, with a rate cut expected to be announced at 1900 GMT, followed by remarks from Chairman Jerome Powell at 1930 GMT. Currently, the market anticipates an 88% chance of a 25 basis point cut.
Nitesh Shah, a commodity strategist at WisdomTree, noted, “Gold is kind of trading in a range until we get news from the FOMC. It’s not just the rate cut that affects gold, but the guidance for the future.” He added that increasing U.S. Treasury yields were currently putting pressure on gold.
The benchmark 10-year U.S. Treasury yield has recently reached its highest level in over three months.
Menke also pointed out that, in recent weeks, demand for gold—measured by holdings in physically backed commodities—has not matched that of silver, which is a significant reason for gold’s stagnation.
Carolan de Palmas from ActivTrades emphasized that “Gold performance remains one of the main drivers of silver prices. A downturn in gold could lead to increased volatility in silver.”
Meanwhile, Kevin Hassett, a White House economic adviser and a possible successor to Powell as Fed chair, mentioned on Tuesday that there’s “plenty of room” for additional rate cuts, although rising inflation might complicate things.
Generally, lower interest rates are beneficial for non-yielding assets like gold.
RBC Capital Markets has adjusted its long-term forecast for gold, predicting an average price of $4,600 per ounce in 2026 and $5,100 in 2027, citing factors like geopolitical uncertainties, easy monetary policy, and ongoing fiscal deficits.
