Fed Hawkish Pause Sends Gold Soaring, Silver Plummeting
The Federal Reserve's decision to keep interest rates unchanged at 3.5%, 3.75% has led to a split in the precious metals market, with gold surging and silver sinking.
The Fed's hawkish pause was met with dissent from three regional presidents who voted for an immediate 25-basis-point rate hike, the strongest signal of dissent since September 2016.
Despite this, gold prices rose to above US$4,105 per ounce immediately after the meeting, overriding interest rate headwinds due to its safe-haven value and dual attributes.
Silver, on the other hand, has been affected by both monetary and industrial attributes, with surging real yields increasing the opportunity cost of holding the non-yielding metal and reducing physical demand flows in the futures market.