Market Overview

Spot gold and silver prices fell sharply after Wednesday’s trading session, as the U.S. Federal Reserve kept interest rates unchanged but signaled that elevated inflation could force the central bank to maintain a restrictive stance, or even consider one more rate hike later this year.

At the time of writing, spot gold was trading around USD 4,260.10 per ounce, down 1.65%. Meanwhile, spot silver saw a deeper decline, trading around USD 67.885 per ounce, down 3.08% for the session.

Fed Holds Rates Steady but Remains Cautious

The Fed kept the target range for the federal funds rate unchanged at 3.50% - 3.75%, with a unanimous 12-0 vote.

In its policy statement, the Fed said the U.S. economy continues to expand at a steady pace, while inflation remains above the 2% target. Supply shocks, partly related to energy, are still putting pressure on prices across several sectors.

Notably, the latest projections showed the median federal funds rate for 2026 rising to 3.8%, up from 3.4% in the March forecast. This suggests that the Fed is leaning toward a more hawkish stance than markets had previously expected.

Why Were Gold and Silver Sold Off?

Before the meeting, most market participants had already expected the Fed to keep rates unchanged. However, the negative reaction in gold and silver came from the fact that the Fed did not provide a clear easing signal, while the possibility of another rate hike was brought back into discussion.

Short-term U.S. Treasury yields rose sharply as investors repriced the possibility that the Fed’s next move could be a rate hike rather than a rate cut. This directly pressured gold and silver, as precious metals do not generate yield and tend to become less attractive when real yields rise.

After initial recovery attempts, both gold and silver reversed lower. Silver, in particular, failed to sustain its short-term rebound, putting the 200-day moving average back into focus as a key technical level.

Gold Technical Analysis

From a technical perspective, gold bulls need to push prices above the USD 4,366 - 4,390 per ounce resistance zone to regain clearer recovery momentum. If this area is broken, the next upside targets could be near the 200-day moving average around USD 4,462 per ounce, followed by the 50-day moving average near USD 4,563 per ounce.

On the downside, the nearest support zone to watch is around USD 4,227 per ounce. If this level is broken, selling pressure could extend toward USD 4,023 per ounce, followed by the key psychological zone at USD 4,000 per ounce.

Key technical levels:

• Near-term resistance: USD 4,366 and USD 4,390

• Near-term support: USD 4,227 and USD 4,023

• Key psychological support: USD 4,000

Silver Technical Analysis

For silver, buyers need to push prices back above the USD 71.56 - 71.84 per ounce resistance zone to improve the recovery outlook. If this area is cleared, the next upside targets could be around USD 72.47, followed by USD 74.60.

On the downside, the key level to watch is the 200-day moving average around USD 68.72 per ounce. If silver breaks below this level, deeper downside targets could be seen at USD 66.53 and then USD 65.34.

Key technical levels:

• Near-term resistance: USD 71.56 and USD 71.84

• Near-term support: USD 68.72

• Deeper support levels: USD 66.53 and USD 65.34

Conclusion

Gold and silver prices fell sharply after the Fed kept interest rates unchanged but signaled that it remains cautious about inflation. This pushed markets to reassess monetary policy expectations, driving yields and the U.S. dollar higher and putting pressure on precious metals.

In the short term, gold needs to hold the USD 4,227 per ounce support zone to avoid the risk of a deeper decline toward USD 4,023 and USD 4,000. For silver, the USD 68.72 per ounce level remains an important area to watch.

The market will continue to focus on the Fed’s interest rate policy, U.S. Treasury yields, the U.S. dollar, and geopolitical developments to determine the next direction for gold and silver.

📌 This content is for market perspective sharing only and does not constitute a buy or sell recommendation or investment advice.

Source: Kitco