FX.co ★ Silver Declines as Fed Decision Looms

Silver experienced a decline of over 1%, settling at approximately $42 per ounce on Wednesday. This decrease comes as investors opted to secure profits following a rally to 14-year highs. The shift occurs in anticipation of the Federal Reserve's policy announcement, where a 25 basis point rate cut is highly anticipated. The market has already factored in an estimated 67 basis points of rate cuts by the year's end. These projections are bolstered by indications of a cooling labor market, despite inflation remaining above the Fed’s 2% threshold. Attention will also converge on the Fed’s quarterly Summary of Economic Projections, notably the "dot plot" rate forecasts. Meanwhile, the central banks of Canada and China are anticipated to ease their monetary policies this week, whereas those of Japan and the UK are expected to maintain their current stances. Nonetheless, silver prices continue to receive strong support from robust industrial demand in sectors such as solar energy, electric vehicles, and electronics, coupled with ongoing supply limitations.