Hawkish Fed Weighs on Silver as Price Retreats from $60
The silver price has retreated from its recent gains, with investors focusing on the Federal Reserve's hawkish stance rather than the decision to leave rates unchanged. The Fed's 9-3 vote showed that pressure for tighter policy is building inside the central bank, even as officials chose not to act immediately.
Silver's exposure to manufacturing leaves it sensitive to both borrowing costs and industrial demand. Unlike gold, silver must contend with its role in electronics, solar equipment, and other industrial applications, which can be affected by high prices.
The Silver Institute expects global industrial fabrication to decline 2% this year to about 650 million ounces, a four-year low. Physical investment is forecast to jump 20% to a three-year high of 227 million ounces, cushioning potential selloffs.