Gold and Silver Rise as Oil Prices Fall Ahead of Fed Rate Decision

Gold and silver prices rose on Wednesday as falling oil prices and lower bond yields provided some relief ahead of the Federal Reserve's rate decision. The Fed is expected to raise interest rates, with markets pricing in around 90% to 93% odds of a move.

However, traders are more focused on Fed Chairman Kevin Warsh's comments at his press conference this afternoon and the updated 'dot plot' showing officials' expectations for future rate moves. The data released so far today, including August retail sales and the NAHB housing market index, has been positive, with retail sales rising 1.2% and the control group component up 1.4%.

The drop in oil prices is easing some of the immediate inflation fears that had pushed gold to record highs. But investors remain wary of further disruption to Gulf oil supplies, which could send energy prices back higher and keep a defensive bid under metals.

Gold has rebounded from the $4,283 support zone and is approaching resistance at $4,354, while silver has recovered above $64.40 and is testing the next upside area near $65.28.