FX.co ★ Silver Holds Rebound After Fed

Silver prices surged past $48 per ounce on Wednesday, recovering from recent one-month lows amidst a combination of technical buying and new policy announcements. The Federal Reserve's decision to reduce interest rates by 25 basis points, setting a new target range of 3.75% to 4.00%, was a key factor. Additionally, the Fed indicated that it will cease its balance sheet reduction after November, with securities reductions wrapping up on December 1st. This move effectively lowers real short-term interest rates and enhances liquidity, which is advantageous for non-yielding assets like metals. Furthermore, the extended U.S. government shutdown has resulted in delays of significant economic data, heightening market sensitivity to any new information. Market participants are also closely monitoring the anticipated meeting between President Trump and President Xi on Thursday, as they hope for a potential trade agreement that might stall the implementation of new U.S. tariffs and ease China's restrictions on rare earth elements, likely decreasing the demand for safe-haven assets. The prior week saw silver dip by over 6% due to profit-taking following a historic rise, which has now contributed to the current technical rebound.