Silver Price Forecast: XAG/USD slips below $53.50 amid Fed outlook uncertainty

Silver prices (XAG/USD) continue to decline for the second day in a row, trading near $53.30 per troy ounce in Asian trading hours on Thursday. The precious metal struggles to break above one-year lows following the US Federal Reserve's decision to keep interest rates unchanged, as traders expected. The central bank offered little insight into the timing and direction of its next policy move, highlighting resilient economic activity with steady domestic spending, robust capital investment, and strong productivity growth.

The Fed acknowledged elevated inflation but chose to pause further rate hikes to collect more data. Fed Chair Kevin Warsh reaffirmed the committee's commitment to achieving a 2% inflation target. Market participants are now focused on the upcoming US Personal Consumption Expenditures (PCE) price index for clearer signals on monetary policy.

Meanwhile, diplomatic efforts aim to prevent further conflict escalation in the Middle East, but high oil prices continue to pressure inflation and support expectations of sustained high interest rates. This environment of rising costs presents challenges for Silver, as higher yields and persistent rate pressure negatively impact non-yielding precious metals.