- Silver prices will look towards today's interest rate decision, the first under Kevin Warsh's tenure as Fed Chair.
There has been a significant shift in silver prices since the early days of the Iran conflict, which drove massive volatility in the white metal. As of today, the narrative has shifted from the war risk towards the newly announced US-Iran truce. The truce announcement has sharply reduced the prevailing market fears of a more prolonged disruption in energy supply. Oil prices have fallen below $80 and now trade around $70 a barrel, after Iran promised to reopen the key Strait of Hormuz shipping route.
The situation has reduced safe-haven demand for the US dollar and brought on risk-on sentiment to financial markets, putting pressure on the dollar for most of the week. However, the most anticipated risk event this week is the US interest rate decision and how it will affect silver prices.
This is the first decision under new Fed Chair Kevin Walsh, who is a known hawk. Today’s rate decision and press conference will provide an outlook on US international expectations now that the war-risk premium has dissipated. It will also have implications for US Treasury yields and the US dollar’s valuation. Presently, silver is trading near the psychological resistance level of $70 per ounce, having recovered from recent lows amid US dollar weakness. However, silver price remains well above the $120-per-ounce peak reached in January 2026.
Macro Drivers for Silver Price
1) Fed rate expectations
The Fed rate expectations are now the biggest driver. While the consensus is for rates to stay unchanged at 3.50%-3.75%, the key issue is as follows:
- updated economic projections.
- The dot plot.
- The new Fed Chair’s guidance on inflation and future policy (at the press conference).
A dovish Fed rekindles easing expectations, lowering US bond yields and devaluing the US Dollar, both of which are supportive for silver prices. A hawkish Fed brings the opposite: higher-for-longer expectations, higher US bond yields, a stronger USD, and pressure on silver prices.
2) Global Risk Sentiment
The geopolitical situation remains fluid, and if negotiations over the knotty issue of Iran’s nuclear ambitions dovetail into renewed escalations, the market can quickly switch back into a risk-off mood. Given silver’s high-beta nature and propensity for oversized moves in times of intense volatility, we could see silver switching back into two-way, volatile consolidation, as shown at the height of the oil-shock risk premium.
Silver Price: Weekly Forecast Scenarios
Base case: the status quo keeps silver in consolidation, especially if the Fed decision today does not provide information that tilts sentiment to either side.
Bull case: a dovish Fed will lower bond yields and weaken the US Dollar, which will be bullish for metal assets such as silver, especially now that the oil-shock risk premium has dissipated. The combination of lower yields and improving risk sentiment would be extremely supportive.
Bear case: a hawkish Fed surprise (“higher-for-longer” rate expectations or language suggesting that easing is not on the horizon), or language highlighting inflation risks, will significantly strengthen the dollar. This situation will put pressure on silver prices.
Silver Price: Technical Outlook
The price action is now testing the 70.73 resistance (prior low of 31 December 2025 and 21 April 2026). If the bulls uncap this barrier. it unlocks a potential move to the 26 May high at 79.05. Above this barrier, the 89.65 resistance and highs of 10 March and 13 May 2026 becomes the new upside target.
On the flip side, rejection at 70.73 makes a case for a decline towards the 61.50 support and prior lows of 23 March and 11 June 2026. The highs of 16 October and 13 November 2025 form the next downside pivot at 54.25.
