Precious metals walked into Federal Reserve decision day with a bid for the first time all week. Spot gold traded near $4,342.50 an ounce Wednesday morning, up 1.16% on the session, while spot silver ran 1.62% higher to $64.58, according to Kitco's a.m. report — a recovery built on softer crude oil and a modest easing in the Treasury-yield pressure that had been grinding metals lower since Friday.
Silver did the heavier lifting. December futures opened at $64.18 an ounce, up 0.5% from Tuesday's close, and reached $65.08 by 6:42 a.m. ET, Yahoo Finance reported, lifting the metal out of the $63-to-$64 band it had held all week. Silver remains down 3.2% from a week ago and 1.2% from a month ago, but it is still up 51.1% year over year.
Yesterday's Low Set a Cheap Base
The rebound is easier to read against Tuesday's damage. Physical gold slipped to a six-week low near $4,263 as the dollar firmed ahead of the decision, USAGOLD reported — a level that put the metal roughly $1,200 below the record above $5,500 it set early this year.
Two of the pressures behind that slide relaxed Wednesday. West Texas Intermediate eased to $103.70 a barrel and Brent to $107.60, backing off a run that had carried crude past $100 on Saudi and Iranian supply disruptions. The 10-year Treasury yield settled back to roughly 5.00% after touching 5.041% on Tuesday, its highest print since 2007.
For metal that pays no coupon, a stalled move in real yields is all the invitation a short-covering bounce needs.
A Hike Is Not the Question
The Federal Open Market Committee announces at 2 p.m. ET, and the CME FedWatch tool put the probability of a quarter-point increase at 92.5% — up from roughly 33% a month ago. That would lift the federal funds target range to 3.75%–4.00% from the 3.50%–3.75% band the committee has held all year, and would mark the first increase since 2023. August CPI ran at 3.4% annually, and the energy shock tied to the conflict with Iran has kept the inflation path uncomfortable.
Because the move is effectively priced, the reaction function sits elsewhere: the updated Summary of Economic Projections and Chair Kevin Warsh's press conference. The consensus going in looks for a median dot showing roughly 75 basis points of tightening through the end of 2027 — two hikes this year including today's, one more next year. J.P. Morgan and HSBC both now forecast quarter-point increases in September and December.
TD Securities' macro team expects the 25-basis-point hike but looks for a dot plot signaling fewer hikes than markets currently imply, a combination it thinks produces knee-jerk dollar weakness. That is the scenario metals bulls want, since the dollar's recent firmness has been the proximate drag.
Where the Targets Sit
Wall Street's published gold forecasts remain at or above spot: Goldman Sachs at $4,900, HSBC at a $4,560 average, J.P. Morgan at $4,500 for the fourth quarter and Bank of America at $4,360. Kitco flagged near-term gold resistance at $4,354, $4,403 and $4,433, with support at $4,316 and $4,283. Silver resistance sits at $65.28 and $65.98, support at $64.40 and $63.45.
By 2:30 p.m., the dots will have decided which side of those levels matters.
Sources: Kitco News, Yahoo Finance, USAGOLD, CNBC, FXStreet / TD Securities, Chase