Silver Steadies at $57 Ahead of Fed Decision

Silver traded around $57 an ounce on Wednesday, little changed from the previous session and hovering near its lowest level since December 2025, as investors awaited the Federal Reserve's policy decision. While the Fed is expected to keep interest rates unchanged, markets are pricing in a roughly 40% chance of a 25-basis-point hike today and an 80% probability of another increase in September. Elsewhere, the Bank of England and the Bank of Japan are also expected to leave rates unchanged this week while maintaining a cautious tone on inflation. Meanwhile, Commerzbank lowered its year-end gold price forecast to $4,500 per ounce and reiterated its expectation for silver to reach $67 per ounce. Geopolitical risks remained in focus after Tehran reportedly rejected Oman's proposal for joint regional management of the Strait of Hormuz, while oil prices rose following joint US-Saudi strikes in Iraq.

Silver traded near $57 an ounce on Wednesday, holding the previous session’s decline as oil prices rebounded following renewed hostilities in the Middle East, reviving geopolitical tensions and keeping investors focused on inflationary pressures and the interest rate outlook. The US military said it had successfully intercepted what it described as a surprise Iranian attack targeting US troops stationed across the Middle East. Investors also awaited the Federal Reserve’s policy decision, where it is expected to leave interest rates unchanged. However, markets continue to price in about a one-third chance of a rate hike, reflecting an unusually high level of uncertainty this close to a policy announcement despite repeated calls from President Donald Trump for lower interest rates. Traders also assign roughly an 80% probability to a rate increase in September, reinforcing expectations that borrowing costs could remain elevated.

Silver prices fell about 2% to around $57 an ounce on Tuesday, pressured by a stronger US dollar and investor caution ahead of Wednesday's Federal Reserve policy decision. The dollar remained near a four-week high as markets priced in more than a one-third chance of a rate hike, an unusually high level of uncertainty this close to a Fed meeting despite President Donald Trump's repeated calls for lower interest rates. Investors also continue to assign roughly an 80% probability to a rate increase in September, reinforcing expectations that US borrowing costs could stay elevated. Meanwhile, optimism over a potential easing of tensions between the US and Iran reduced demand for safe-haven assets. On Monday, Trump said Washington was engaged in "good talks" with Iran and that a deal to resolve the conflict was possible, while warning that military strikes could resume if negotiations break down.