Fed Hawkish Shift Triggers Sell-Off in Gold and Silver

Spot gold dropped 1.65% to $4,260.10 an ounce, while silver fell 3.08% to $67.885. The sell-off intensified after the Fed released updated projections, pushing the median 2026 federal funds rate to 3.8%, up from the 3.4% estimate provided in March. This shift removed expectations for near-term easing, causing Treasury yields to spike and forcing traders to price in the possibility of further hikes.

The broader market reaction hit high-duration equities and small caps with equal force. The S&P 500 slid 1.2% to 7,420.10, and the Nasdaq Composite fell 1.3% to 26,021.66. While declining oil prices—linked to a potential U.S.-Iran interim agreement on the Strait of Hormuz—initially offered a glimmer of relief, the impact was quickly eclipsed by the Fed’s hawkish signal, which redirected focus toward rising real yields and a firmer U.S. dollar.

Technically, gold bulls now face the challenge of reclaiming the $4,366.00 to $4,390.00 resistance zone to regain momentum. Meanwhile, silver bears are eyeing a sustained break below the 200-day moving average at $68.72, a move that would open the door to deeper support levels near $66.53.