Silver Gains as Markets Await Fed Decision

Key Moments

Geopolitical Tensions Lift Oil While Silver Edges Higher

Silver prices (XAG/USD) are trading higher during the Asian session on Wednesday, with the metal up 1.14% and hovering near $57.80. The advance comes even as crude oil extends a strong rebound, a development that typically complicates the outlook for non-yielding assets.

At the time of writing, West Texas Intermediate (WTI) crude is up 3.65% to about $81.20, breaking a three-day losing streak.

The move in energy markets follows fresh geopolitical developments. The U.S. Central Command (CENTCOM) reported late Tuesday that it intercepted all ballistic missiles launched by Iranian Islamic Revolutionary Guard Corps (IRGC) forces. CENTCOM also reported conducting precision strikes in Iraq against Iran-backed groups that it said were planning attacks on U.S. forces and Saudi oil installations.

In recent months, silver has lagged as higher oil prices have supported firmer inflation expectations, encouraging global central banks to maintain or raise interest rates. This backdrop has weighed on silver, which, as a non-interest-bearing asset, typically struggles in a higher-rate environment.

Fed Policy Decision in Focus

Market participants are now focused on the upcoming Federal Reserve policy announcement scheduled for 18:00 GMT. Data from the CME FedWatch tool show that traders see a 69.5% likelihood that the Fed will keep its target range at 3.50%-3.75%, which would mark the fifth consecutive meeting without a rate change.

Investors are not looking for new forward guidance from policymakers. Chairman Kevin Warsh stated in the prior meeting that “so-called forward guidance is not well-suited in the current policy juncture”.

Silver Technical Setup: Bearish Tone Persists

Despite Wednesday’s gains, XAG/USD continues to exhibit a cautious, downside-leaning short-term profile. Silver is trading around $57.63 at press time and remains below its 20-day Exponential Moving Average (EMA), positioned near $58.93.

The failure to reclaim this short-term EMA suggests that rallies are still being sold, while the Relative Strength Index (RSI) near 43 remains under the neutral 50 threshold. This indicates that bearish pressure continues to dominate, even though the market is not yet in oversold territory.

On the upside, the 20-day EMA around $58.93 is the first significant resistance. A daily close above this level would be needed to lessen the current bearish bias and could allow a move toward $60.00. On the downside, the July 17 low at $54.77 is the primary support zone that traders are monitoring.