Gold and silver fall as investors brace for hawkish Fed decision

Gold and silver prices declined on Wednesday, October 28, surrendering part of their recent recovery as investors prepared for the Federal Reserve's monetary policy decision later in the day.

A firm US dollar and expectations of another interest rate increase before year-end weighed on precious metals, despite persistent geopolitical tensions in the Middle East.

Price overview

Spot gold traded around $4,030 an ounce during Wednesday's morning session, down approximately 0.75%.

Spot silver fell to around $53.75 an ounce, losing approximately 1.2%.

Gold remained above the psychologically important $4,000 threshold, while silver struggled to recover toward $55.

Federal Reserve decision dominates trading

The Federal Reserve is widely expected to maintain interest rates at 3.75%–4.00% when its two-day meeting concludes Wednesday.

However, investors will closely examine Chairman Kevin Warsh's remarks for indications of another rate increase in December.

Persistent inflation, particularly from higher energy costs, has complicated the central bank's outlook.

Further tightening could strengthen Treasury yields and the dollar, increasing pressure on non-yielding assets such as gold and silver.

Recent recovery loses momentum

Gold had recovered above $4,060 on Tuesday after briefly falling below $4,000 earlier in the week.

The rebound was supported by easing oil prices and hopes of diplomatic progress involving Iran.

However, Wednesday's decline suggests investors remain reluctant to increase exposure before the Fed's announcement.

Silver has faced additional pressure from concerns about industrial demand and slowing economic growth.

Market outlook

Gold faces immediate support near $4,028, followed by $4,000, while resistance stands around $4,070.

Silver could encounter support near $53.70, with resistance around $54.50.

A hawkish Fed announcement could extend the decline in both metals, while any indication that interest rates are approaching their peak may encourage renewed buying.