Silver declines as Fed decision looms

Silver fell more than 1% to around $42 per ounce on Wednesday, pulling back from 14-year highs as investors locked in profits ahead of the Federal Reserve’s policy decision.

The Fed is widely expected to cut rates by 25 basis points later today, with markets pricing in about 67 basis points of easing by year-end.

Those expectations have been supported by signs of a cooling labor market, even as inflation holds above the Fed’s 2% target.

Investors will also focus on the Fed’s quarterly Summary of Economic Projections, including the “dot plot” outlook for rates.

Elsewhere, central banks in Canada and China are expected to ease policy this week, while those in Japan and the UK are likely to stand pat.

Still, strong industrial demand from solar, electric vehicles and electronics, combined with supply constraints, continues to lend support to silver prices.