Silver traded near $53.97 on Thursday as investors digested the Federal Reserve’s latest interest rate decision, with the metal remaining about 24% below its September high. The Fed kept rates unchanged at 3.75%–4.00%, though two officials voted for a 0.25% hike. Fed Chair Kevin Warsh emphasized that inflation remains too high, citing September CPI readings of 3.7% headline and 2.6% core, further above the 2% target.
Analysts including Goldman Sachs now see a December rate hike as likely, especially as gasoline and diesel prices continue to rise. US bond yields climbed, with the 10-year reaching 5% and the 5-year moving to 4.8%, making yielding bonds more attractive relative to silver. Higher borrowing costs may also weigh on industrial demand for silver used in chips, solar panels and appliances.
The next key catalysts are the upcoming US PCE inflation data and Q3 GDP report, with economists expecting growth of 3.2%, up from 2% in Q2. Despite the bearish technical setup, the iShares Silver ETF has attracted more than $960 million in inflows over three months. Silver has formed an inverted cup-and-handle and bearish flag pattern, trading below the 50-day and 100-day moving averages. A break below $50 would confirm downside, while a move above $54 would invalidate the bearish outlook.
For crypto markets, the hawkish Fed tone and rising yields represent a challenging macro backdrop, as tighter liquidity conditions tend to reduce appetite for risk assets.
