The Federal Reserve’s decision to keep interest rates unchanged has generally eased some pressure on gold and silver. However, the Fed’s continued emphasis on controlling inflation shows that monetary policy remains restrictive.

This may help precious metals hold within their current ranges, but it is not yet enough to establish a clear upward trend.

Fed Holds Rates but Retains a Tightening Bias

The Fed left interest rates unchanged at its latest meeting, although three members voted in favor of a 25-basis-point increase.

According to analysts, these dissenting votes show that inflation remains a major concern. Nevertheless, most FOMC members agreed to pause further rate increases, effectively shifting much of the market’s uncertainty toward the September meeting.

Markets are currently pricing in around a 60% probability of a Fed rate increase in September.

Gold Needs to Break Above $4,100 to Strengthen Its Recovery

Gold has remained relatively resilient despite expectations of higher interest rates. This suggests that much of the negative sentiment may already be reflected in current prices.

From a technical perspective, gold needs to break decisively above $4,100 per ounce to confirm further strength. If successful, the next resistance zone would be between $4,300 and $4,600 per ounce.

However, low summer trading volumes may keep prices moving within a narrow range until September.

Silver Awaits a Breakout Above the $60 to $70 Zone

Silver continues to maintain a constructive technical structure after breaking out of its previous triangle pattern.

However, to confirm a stronger recovery, the price needs to move decisively above the $60 to $70 per ounce resistance zone. Such a breakout may depend on trading volumes returning after the summer period.

Inflation Data Will Determine the Next Direction

Before the September meeting, markets will receive two additional CPI reports. These releases will play an important role in determining whether the Fed needs to raise interest rates again.

Oil-price developments amid tensions involving Iran may also affect inflation and expectations for monetary policy.

Conclusion

The Fed’s decision to hold interest rates steady has helped gold and silver avoid stronger selling pressure, but its hawkish stance may continue to limit their upside in the short term.

Precious metals could remain range-bound until markets receive more inflation data and clearer signals from the Fed ahead of the September meeting.

Source: Kitco