Improving sentiment reverses post-FOMC moves: Gold and Silver rebound

Expectations heading into yesterday’s FOMC meeting were straightforward: the Federal Reserve needed to raise interest rates to justify the aggressive market pricing ahead of the decision, and it did just that. The Fed raised its target range by 25 basis points from 3.50%– 3.75% to 3.75%–4.00%, marking its first interest-rate increase since July 2023.

However, the market’s focus was not only on the rate decision but also on the Fed’s future policy path. Kevin Warsh and the Federal Reserve signaled the possibility of another rate hike later in 2026, and the market responded accordingly.

EUR/USD dropped about 0.80% from 1.1545 to 1.1453, while GBP/USD fell approximately 0.65% from 1.3458 to 1.3370. Gold declined about 3% from $4,367 to a low around $4,235, while silver dropped almost 4% from $64.84 to approximately $62.30.

In today’s session, however, there has been little follow-through from the initial FOMC moves, with the US Dollar holding relatively steady. EUR/USD is barely changed, while GBP/USD is down about 0.10% ahead of the Bank of England’s monetary policy decision.

Gold and silver are both up by more than 1%, recovering much of yesterday’s losses.

Gold is trading around $4,350 at the time of writing, having rebounded strongly from its low near $4,235. Price is now threatening a break above the resistance around $4,360 despite the Fed’s hawkish message. Silver is also pushing higher, with price recovering towards $64.25 and keeping the resistance around $65.50 in focus.

What is happening in the market?

Current price moves do not fully reflect the outcome of yesterday’s hawkish Fed meeting, particularly with precious metals pushing strongly higher. The recovery appears to be linked to an improvement in broader market sentiment and easing concerns over potential oilsupply disruptions.

Oil prices are down sharply, suggesting that the latest moves remain connected to developments in the US-Iran conflict. Reuters reported that Saudi Arabia is maintaining crude shipments through additional loadings off Oman’s Sohar port. Expectations that Saudi Arabia’s East-West pipeline could also return sooner than anticipated have helped ease immediate supply concerns.

Market sentiment remains a short-term driver of price, meaning the current moves could still change quickly if another negative headline emerges from the US-Iran conflict. It is also important to note that today’s price action does not represent a fundamental shift in the outlook for the US Dollar. Therefore, gains in gold and silver could still be capped around their respective resistance levels.