Silver prices fell to around $33 per ounce on Wednesday, pulling back from a two-day rally, as improved risk sentiment across global markets reduced the demand for traditional safe-haven assets.
Silver slips on US-China trade optimism
The retreat in prices came as investors responded positively to news that top US and Chinese trade officials are scheduled to meet in Switzerland later this week. The meeting, seen as a potential breakthrough in the ongoing tariff standoff, raised hopes that negotiations could begin to ease trade tensions that have rattled markets and disrupted global supply chains.
Further contributing to the risk-on sentiment was the People’s Bank of China’s announcement of another round of interest rate cuts aimed at supporting growth in the world’s second-largest economy. The central bank’s move was interpreted as a strong signal of Beijing’s willingness to stabilize domestic demand and restore investor confidence amid faltering manufacturing activity and weakness in the property sector. The stimulus measures boosted appetite for riskier assets, such as equities and industrial metals, while pulling attention away from precious metals like silver.
Investor focus turns to the Fed
Meanwhile, investor focus turned toward the upcoming Federal Reserve policy decision. While markets overwhelmingly expect the Fed to hold rates steady, all eyes will be on Chair Jerome Powell’s post-meeting remarks for any signals about the direction of future monetary policy. With inflation still hovering above the Fed’s target and political pressure from President Trump intensifying, market participants are eager to gauge how the central bank plans to balance its dual mandate against growing calls for looser financial conditions ahead of the 2026 election cycle.
In addition, volatility in precious metals markets was tempered by a stronger US dollar early in the session, although gains were capped by dovish expectations surrounding the Fed. Silver also faced headwinds from easing geopolitical risks in the Middle East and Eastern Europe, as ceasefire talks in key conflict zones gained traction. However, some underlying caution persisted, as uncertainty remained over whether the latest trade overtures between Washington and Beijing would translate into tangible de-escalation.
Looking ahead, silver markets are expected to remain sensitive to developments on both the trade and monetary policy fronts. While the recent pullback reflects a near-term shift in sentiment, ongoing concerns about inflationary pressures from potential tariff escalations and the longer-term trajectory of global interest rates are likely to keep the metal in focus for both investors and industrial users.
