Silver jumped more than 7%, reversing an early slide below $63, after the Federal Reserve's rate-path projections came in less aggressive than markets had priced. The metal is now testing the swing-high area near $68.
Silver reverses after a brief slide below $63
Silver briefly slipped below the $63.00 support level after the FOMC decision, but the move reversed quickly. The Fed delivered the widely expected 25 basis-point rate hike and projected one additional rate hike in 2026, then sees rates holding steady through 2027 before cuts resume in 2028.
The initial market reaction was hawkish even though the Fed's dot plot was actually less aggressive than what markets had priced in. Ahead of the meeting, traders had expected one additional hike in both 2026 and 2027; the Fed matched the 2026 call but signaled no extra hike in 2027, against a market that had priced one hike in 2026 and two in 2027. Fed Chair Warsh was perceived as more hawkish than expected, though his comments largely echoed his Jackson Hole speech, with only limited adjustments following the hike.
Once that initial reaction faded, silver reversed course and began its rally, with the metal now approaching the swing high near the $68.00 level.
Middle East calm and US data could extend the move
Further support could come from de-escalation in the Middle East, which would ease both oil prices and rate-hike concerns. Trump called a meeting with Gulf leaders on the sidelines of the UN General Assembly in New York to discuss next steps in the war with Iran, with the Iranian delegation set to take part. A de-escalation would send oil prices lower, easing inflation and rate-hike concerns and, in turn, supporting silver.
US economic data is another driver to watch. Positioning and market expectations are stretched, so even a modest downside surprise in the data could push expectations for aggressive rate hikes lower, giving silver an additional boost. The Flash US PMIs are due Wednesday.
Source: Investinglive.com
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