Silver Prices Pull Back Amid Hedging Ahead of Fed Decision

Silver prices retreated on Tuesday after opening higher earlier in the week due to improved sentiment following the US-Iran ceasefire. The news triggered a decline in oil prices, but silver's gains were short-lived as traders focused on hedging ahead of the Federal Reserve's (Fed) crucial decision on interest rates.

The Fed is expected to hold interest rates steady, although there may be one or two dissenting votes for a rate hike. The forward guidance from the Fed Chair Powell will likely remain limited. Based on recent comments from policymakers, the pace of monthly inflation increases will dictate the potential tightening pace.

If the situation in the Middle East remains calm and the Fed delivers on expectations without any hawkish surprise, then a relief rally might occur in the short-term, driven by US-Iran developments and US inflation releases.