Commodities
Silver Price Slump: Fed Rate Hike Projection Takes Center Stage
Silver prices experienced a sudden drop after the Federal Reserve's interest rate hike announcement. The front-month COMEX silver price reached $65.465 an ounce before falling to as low as $62.75, and ending at $63.515 at 4:18 p.m. ET on Wednesday.
The reversal was attributed to the Fed's projected rate path, which showed a median estimate of 4.1% federal funds rate by the end of both 2026 and 2027. This implies another interest rate hike this year and no quick reversal in 2027.
Higher prospective cash yields raise the opportunity cost of holding silver, as it pays no income. The market's vulnerability to a fast unwind was also noted, with silver positioning remaining light by historical standards.