Silver Pressured Ahead of Fed Verdict

Silver traded near $79 per ounce on Wednesday, holding losses from the previous session as investors awaited the latest US Federal Reserve policy decision while assessing inflation risks from the Iran conflict. The Fed is widely expected to keep interest rates unchanged, with traders focused on guidance from Chair Jerome Powell on how oil market volatility could influence future policy. Rising oil prices have heightened inflation concerns, with markets largely ruling out a near-term Fed rate cut and pricing in only a single reduction this year. Iran intensified attacks on regional energy infrastructure this week, while US allies rejected President Donald Trump’s call to help secure commercial shipping through the Strait of Hormuz. Still, Iran has allowed safe passage for some vessels depending on their affiliations.

Silver fell to around $80 per ounce on Tuesday, hovering near a one-month low, as markets continued to assess the inflationary risks from the Middle East conflict and potential impacts on monetary policy. The US–Israel–Iran tensions have entered their third week, with Iran stepping up attacks on energy infrastructure across the region. While the unrest has driven investors toward safe-haven assets, it has also kept energy prices elevated, raising concerns that sustained increases could intensify inflationary pressures and reinforce central banks’ hawkish stance. Investors anticipate that the Federal Reserve will hold interest rates steady for a second consecutive meeting, while other major central banks, including the ECB, BoE, and BoJ, are also expected to maintain their current policy settings. Despite recent weakness, silver remains up about 12% year-to-date, supported in part by a projected supply deficit in 2026 and robust industrial demand from the electronics sector.

Silver rose above $81 per ounce on Tuesday, gaining support this week as the dollar and Treasury yields eased on lower oil prices, which helped temper inflation concerns. Oil retreated at the start of the week following the safe passage of several tankers through the Strait of Hormuz. US Treasury Secretary Scott Bessent said the US is allowing Iran to continue shipping crude via Hormuz, while President Donald Trump is seeking support from other countries to safeguard commercial activity in the waterway. Investors are also anticipating a likely rate hold from the US Federal Reserve this week as policymakers navigate uncertainties stemming from the Iran war. Silver’s gains are further underpinned by a projected 67 million-ounce supply deficit for 2026 and strong industrial demand from the electronics sector.