Gold and silver slide after hawkish Fed hold – Kitco PM Report

(Kitco NewsWire) – Spot gold and silver prices are sharply lower after the close Wednesday, as the Federal Reserve held rates steady but signaled that higher inflation could force another rate hike this year. At the time of writing, spot gold was trading near $4,260.10 an ounce, down 1.65%, while spot silver was trading at $67.885, down 3.08% on the session.

The Fed left the target range for the federal funds rate unchanged at 3.50% to 3.75% in a unanimous 12-0 vote. The statement said economic activity is expanding at a solid pace, inflation remains elevated relative to the 2% goal and supply shocks tied partly to energy are still driving sector-level price pressure. The new projections put the median 2026 fed funds rate at 3.8%, up from 3.4% in March, with nine participants above the current midpoint of the target range.

Market positioning shifted sharply after the Fed decision. The pre-meeting consensus was for a hold, but the post-meeting reaction was driven by the removal of the easing trade from the dot plot and Warsh’s decision not to submit his own rate projection. Shorter-dated Treasury yields jumped as traders repriced the chance that the next move is a hike, not a cut, and the move hit metals, high-duration equities and small caps at the same time. Gold and silver both gave back early gains, with silver’s five-day counter-trend rally failing at the session high before the 200-day moving average came back into focus.

The proposed U.S.-Iran interim agreement on the Strait of Hormuz would require Tehran to ensure safe passage for merchant vessels, while the U.S. would lift its blockade and issue waivers for Iranian crude, petrochemical, banking, insurance and transportation services. Brent traded below $80 a barrel after a 15% four-session decline, but the market is still pricing execution risk because inventories were drawn down during the disruption and full shipping normalization could take months. 

For gold, the Hormuz effect is no longer a clean haven bid: lower oil reduces the inflation impulse, but the Fed’s post-meeting rate signal shifted the metals trade back toward real yields and the dollar. For equities, the relief from lower oil was overtaken by higher-rate risk after the Fed.

U.S. stocks finished sharply lower after the Fed projections. The S&P 500 fell 91.25 points, or 1.2%, to 7,420.10. The Dow Jones Industrial Average fell 507.12 points, or 1.0%, to 51,492.55. The Nasdaq Composite fell 354.69 points, or 1.3%, to 26,021.66. The Russell 2000 fell 21.21 points, or 0.7%, to 2,917.98.

The key outside markets see Nymex WTI crude oil prices lower, while Brent crude remained below $80 a barrel. The U.S. dollar index is firmer. The yield on the benchmark 10-year U.S. Treasury note is higher, with no approved live intraday level included.

Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,366.00 to $4,390.00 resistance zone, with a sustained move targeting the 200-day moving average near $4,462.00 and then the 50-day moving average around $4,563.00. Bears’ next near-term downside price objective is a break below $4,227.00, with deeper downside targets at $4,023.00 and then $4,000.00. First resistance is seen at $4,366.00 and then at $4,390.00. First support is seen at $4,227.00 and then at $4,023.00.

Spot silver bulls’ next upside price objective is to drive prices back above the $71.56 to $71.84 resistance zone, with a move above that zone targeting $72.47 and then $74.60. The next downside price objective for the bears is a break below the 200-day moving average at $68.72, with deeper downside targets at $66.53 and then $65.34. First resistance is seen at $71.56 and then at $71.84. Next support is seen at $68.72 and then at $66.53.