Gold Holds Near $4,057 as Fed Keeps Rates Steady, Silver Drops

Spot gold was steady at about $4,056.80 an ounce, down $2.50 (0.06%), while spot silver slipped to $53.72, down $0.58 (1.07%) in late U.S. trading on Wednesday. The Federal Reserve kept its benchmark rate at 3.75%-4.00% in a 10-2 vote, but Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, urging a 25-basis-point increase. The committee said economic activity remains strong, with resilient consumer spending, robust capital investment and stable labor-market conditions, but inflation stays elevated, leaving the door open for further tightening.

"Policymakers also acknowledged that inflation remains elevated, leaving the door open to further tightening as additional economic information becomes available," the Fed statement read.

Market participants continue to price an 83% chance of a 25-basis-point hike at the December meeting. Attention now shifts to Thursday’s advance third-quarter GDP estimate, the September personal consumption expenditures inflation report and weekly initial jobless claims, which could shape expectations for December.

Renewed tensions in the Strait of Hormuz, including a missile attack claimed by Houthi forces on Saudi Arabia’s Ras Tanura refinery, lifted Brent crude above $115 a barrel and pushed WTI toward $102. Higher oil prices add to inflation concerns, limiting demand for precious metals despite a softer U.S. dollar.

North American equity markets closed mostly higher, with the Dow up 0.26% near 52,516, the S&P 500 up 0.20% at 7,738 and the Nasdaq flat near 26,479. European markets were mixed, the Stoxx 600 edging up 0.07% to 644.14, while Germany’s DAX rose about 0.4% and the U.K.’s FTSE 100 was unchanged.

The 10-year U.S. Treasury yield hovered around 5.0% and the two-year near 4.76%. The dollar index slipped modestly, offering limited support for gold and silver amid ongoing inflation worries and the prospect of additional Fed tightening.