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Gold prices were steady in Asian trading on Wednesday, holding firm ahead of a widely anticipated interest rate cut from the U.S. Federal Reserve later in the day. Silver, however, dominated the metals complex, surging to a fresh record high on expectations of tightening supplies and rising demand in 2026.
A weaker U.S. dollar supported overall sentiment in precious and industrial metals, although gains were capped by caution over how hawkish the Fed may sound in its updated economic outlook.
By 00:44 ET (05:44 GMT):
- Spot gold edged up 0.1% to $4,211.24/oz
- Gold futures (March) rose 0.1% to $4,239.60/oz
Silver Hits Record High as Supply Concerns and Haven Demand Intensify
Silver extended its explosive rally this week, hitting a new all-time high of $62.018/oz on Wednesday after more than doubling in value so far in 2025.
The surge has been driven by:
- Speculative buying, fueled by expectations of tighter global supply
- Robust industrial demand, especially for electrical components
- The U.S. declaring silver a critical mineral, prompting moves to secure long-term supply chains
- Safe-haven demand, offering a lower-priced alternative to gold amid elevated bullion prices
Silver’s dual role — as both an industrial metal and a financial safe haven — has amplified this year’s upside momentum.
Gold Holds Firm as Dollar Softens Ahead of Fed Decision
Gold prices remained supported as the U.S. dollar slipped in anticipation of the Fed’s expected 25-basis-point rate cut.
Lower interest rates typically boost non-yielding assets like gold by:
- Reducing the opportunity cost of holding bullion
- Weakening the dollar
- Fueling demand for safe-haven assets during economic uncertainty
Other metals also benefited from the softer dollar:
- Platinum briefly touched a two-week high near $1,700/oz
- LME copper futures rose 0.9% to $11,576.95/ton
Fed Outlook and Leadership Speculation in Focus
While a 25-basis-point rate cut is fully priced in, the market remains wary that the Fed could strike a more hawkish tone given:
- Sticky inflation concerns
- Limited fresh economic data due to the federal shutdown
- Policymaker disagreement on the pace of easing
Investors will closely watch Chair Jerome Powell’s press conference for guidance on the 2026 policy path.
Additionally, attention has shifted to the Fed’s future leadership. Reports indicate President Donald Trump will begin final interviews this week to select a successor to Powell, whose term expires in May 2026.
