Silver prices surged on Wednesday, climbing 2.5% to trade around $48.25 per ounce as markets brace for a pivotal decision from the Federal Reserve. The precious metal’s rebound reflects renewed demand for traditional safe-haven assets, driven by mounting geopolitical tensions, heightened fiscal uncertainty in the United States, and expectations of a more accommodative stance from the U.S. central bank.
The renewed bidding for silver comes in tandem with a resurgence in gold prices, which vaulted back above the psychological $4,000 level after falling over 11% from an all-time high of $4,381 reached on October 20. Silver, which had similarly declined by more than 16% from its record highs, reversed course from recent lows near $45.50 as markets grew increasingly confident that the Federal Reserve would implement a 25-basis-point rate cut at the conclusion of its two-day policy meeting.
Investors are closely watching Fed Chair Jerome Powell's remarks for signals of further monetary easing in December, with many anticipating another rate cut before the year's end. Falling interest rates would put downward pressure on the U.S. dollar and government bond yields, thereby increasing the appeal of non-yielding assets like silver and gold.
From a technical perspective, silver’s movement appears less decisive than gold's. While gold's recent decline fits the pattern of an A-B-C corrective wave, a potentially bullish signal, silver's drop took the form of a five-wave impulse pattern, often indicative of a more sustained downtrend. That said, silver has broken through diagonal resistance levels, suggesting the potential for a short-term rally toward the $50–$51 resistance area, though this may prove corrective rather than the start of a new bullish cycle.
Bullish signals have also emerged in momentum indicators. The MACD (Moving Average Convergence Divergence) for silver shows a bullish crossover, and the RSI (Relative Strength Index) is stabilizing near neutral territory, offering additional support for near-term upside.
Beyond the Federal Reserve decision, wider economic and geopolitical developments are also playing a significant role in bolstering silver prices. The ongoing U.S. government shutdown, now entering its fifth week, has delayed the release of key economic indicators, such as the Nonfarm Payrolls report, which are essential for the Fed's policy calibration. The suspension of these data releases adds to market uncertainty and increases the attractiveness of defensive assets.
Further compounding investor apprehension are new U.S. sanctions targeting multiple Russian energy companies and the abrupt cancellation of a planned summit between President Donald Trump and Russian President Vladimir Putin. Meanwhile, uncertainty continues to swirl around upcoming trade talks between President Trump and Chinese President Xi Jinping, aimed at easing tariffs and supply chain disruptions, including China's restrictions on rare earth exports. These geopolitical developments are adding fuel to a broader risk-off sentiment that has pushed investors toward safer assets like precious metals.
Interestingly, the rally in silver and gold is occurring alongside record highs in the equity markets. On Wednesday, both the S&P 500 and NASDAQ hit new all-time highs, with the S&P 500 rising to 6,017, up more than 43% from its April levels. The NASDAQ is showing even stronger momentum, having broken out above ascending trendlines. While these gains reflect investor optimism around rate cuts and a favorable earnings season, they also raise questions about how long such strong equity and commodity price moves can coexist. Historically, gold and silver outperform in risk-off environments, while equities thrive during risk-on phases.
As silver regains its shine ahead of the Fed’s highly anticipated policy announcement, the road ahead appears both promising and uncertain. Strong safe-haven demand, coupled with technical signals, supports a continued rally in the short term. However, the nature of silver’s prior correction and lingering macroeconomic headwinds means the current upward momentum could face resistance as it approaches $50. The outcome of today's FOMC meeting, along with subsequent messaging from Powell, will be instrumental in determining whether silver’s resurgence is merely a technical bounce or the start of a prolonged bull run. Either way, investors are poised for heightened volatility in precious metals as monetary, fiscal, and geopolitical forces continue to converge.