All Eyes on the Fed as Precious Metals Rally

The precious metals market is holding its breath ahead of today's pivotal interest rate decision from the U.S. Federal Reserve. While gold maintains a steady position, silver has achieved a historic milestone, underscoring a powerful sector-wide advance fueled by monetary policy expectations and structural demand.

Market pricing indicates a near-certain 90% probability of a 25-basis-point rate cut from the Fed. Gold is trading firmly around $4,210 per ounce, a level that places it a mere 4% below its all-time peak of $4,381 reached in October. Meanwhile, silver has decisively broken new ground, surpassing the $60 per ounce threshold for the first time in history. Platinum completes the bullish picture, boasting an impressive 80% gain for the year with prices hovering near $1,680.

The Fed's Forward Guidance is Key

Although a quarter-point reduction in the benchmark rate is widely anticipated, the market's reaction will hinge almost entirely on the accompanying commentary. The language used by Fed Chair Jerome Powell regarding the future policy path will be the primary driver. Signals pointing toward an aggressive continuation of monetary easing could provide fresh momentum for gold by reducing its opportunity cost. Conversely, a more restrictive tone might trigger a wave of short-term profit-taking.

From a technical perspective, the $4,180 support level for gold is now critical. As long as this zone holds, the overarching upward trend remains intact, keeping the October record within relatively easy reach.

Should investors sell immediately? Or is it worth buying Gold?

Structural Support from Sustained Buying

Providing a durable foundation for gold prices is the consistent strategic purchasing by the People's Bank of China. The central bank has expanded its reserves for 13 consecutive months, bringing its holdings to 74.12 million fine ounces. This persistent physical demand from a major official buyer creates a structural price floor that helps cushion against any temporary market corrections.

Silver's Independent Ascent

Silver is demonstrating its own potent dynamics, decoupling from gold's lead. Powerful industrial demand, particularly from the solar panel and electronics sectors, is colliding with constrained mine supply—a classic recipe for a supply deficit. Its breakthrough above $60 has propelled the metal into uncharted territory.

Navigating Immediate Volatility

The immediate aftermath of today's Fed announcement is likely to bring heightened volatility across precious metals. While macroeconomic models project a year-end gold price target of $4,465, confirming the primary bullish trend, investors should brace for potential short-term swings around the decision. The fundamental backdrop, however, supported by policy shifts and sustained demand, continues to favor the sector.