According to the CME FedWatch tool, there is a 93% chance that the Federal Reserve will maintain its benchmark interest rate at 4.25-4.50% in January, putting gold under scrutiny as bonds offer better yields.
Silver trading declines due to interest rate concerns
Silver traded at 29.61 and fell slightly during intraday sessions, bottoming at 29.56. A strong dollar and Federal Reserve policies have reduced demand for non-yielding assets like silver. However, the metal’s appeal as a safe haven is still reinforced by geopolitical risks, especially in the Middle East.
Silver’s limited upside potential is attributed to rising US interest rates, which increase the attractiveness of yield-bearing assets. Market participants are now looking to US economic indicators, such as weaker-than-expected durable goods orders (-1.1%) and declining consumer confidence, for further signals.
Short-term forecasting
Gold is consolidating around $2,626, with resistance at $2,651. A break above could target $2,679, while a failure risks a pullback to $2,608.