Silver is making tentative gains on a day dominated by the looming interest rate decision by the Federal Reserve.
The precious metal has had a torrid couple of months, slumping from trading near $26 an ounce in mid-April to struggling around $21 an ounce two months later. The catalyst for this plunge was the prospect of central banks adopting more hawkish monetary policies with a series of interest rate hikes planned over the course of this year.
Live Silver Price – $/oz
A couple of months into that marked change of approach, the Federal Reserve is expected to issue its third consecutive interest rate hike today with the question not whether it will raise rates but by how much?
Fed Chair Jerome Powell had previously stated that 50 basis points moves were sufficient but a late change of opinion by markets earlier in the week saw an increasing number of traders predicting a 75 basis point hike today. Silver investors will be hoping that Powell keeps on message with the Fed keeping within its 50 basis point moves, as this is what has already been priced in. A surprise to the upside would inflict further pain on silver with recent evidence suggesting that the metal will be meted out extra punishment compared with its golden peer given the same market driver.
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