Silver prices are steady as the market waits for the Federal Reserve’s interest rate decision on Wednesday. The US Dollar is stable, and Treasury yields have risen, which may limit short-term gains for silver. Ongoing geopolitical tensions keep demand strong, with expectations of another Fed rate cut in December. Silver (XAG/USD) is holding around $58.40, up slightly by 0.1% today, as traders look ahead to the Fed’s policy announcement. Recent data shows disinflation is slowing, but hope for a December rate cut keeps the market cautious. The US Dollar and Treasury yields are stable, impacting silver in the short term.

US Economic Data and Geopolitical Tensions Impact

U.S. economic reports, including the Personal Consumption Expenditures and mixed job figures, indicate slowing disinflation. This adds uncertainty about upcoming monetary easing, affecting market behavior. Geopolitical issues, especially between Russia-Ukraine and Southeast Asia, bolster the demand for safe-haven assets. The Fed’s decision this week is a key factor that could cause silver prices to fluctuate. Silver is consolidating, impacted by a cautious market and a slight recovery of the US Dollar. Several factors influence silver’s market value, such as geopolitical instability, industrial demand, and its relationship with gold. Silver serves both as an investment and an industrial metal, affecting its price. The Gold/Silver ratio also helps assess the relative value of the two metals.

Market Patterns and Future Outlook

As of December 8, 2025, silver remains steady around $58.40, with the market in a holding pattern before the Federal Reserve’s interest rate decision this Wednesday. Options traders should note low implied volatility, suggesting the market may be underestimating the potential for a big move after the announcement. The CME FedWatch Tool indicates an 85% chance of a 25-basis point cut, meaning attention will be on the Fed’s future guidance for 2026 rather than just the cut itself. We should be cautious, as recent economic data sends mixed signals that could complicate the Fed’s message. The latest Core PCE inflation reading for October was 3.1%, still above the Fed’s target, though slightly lower than the previous month. Meanwhile, the November jobs report showed only 150,000 new jobs added, but average hourly earnings increased by 0.4%, indicating ongoing wage pressures that may make the Fed reluctant to ease aggressively in the future. Geopolitical risks provide a solid support floor for silver. Ongoing tensions from the Russia-Ukraine conflict, which have persisted for years, along with a recent decline in diplomatic relations in Southeast Asia, help sustain defensive demand for precious metals. This creates a safety net for silver prices and reduces the likelihood of significant declines in the near term. Looking further ahead, we must consider the slowdown in global manufacturing against silver’s relative value. Recent manufacturing PMI data from China and the U.S. shows a decline for the third month in a row, which might indicate weakening industrial demand for silver as we enter early 2026. However, with the Gold/Silver ratio around 82, significantly above historical averages from the 2000s, there are arguments for silver being undervalued compared to gold. Create your live VT Markets account and start trading now.

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