Gold and silver rose in trading Wednesday as falling oil prices and a small dip in bond yields offered some relief ahead of the Federal Reserve’s rate decision later in the day.

Gold traded at $4,352.18, up 1.3%, while silver rose 1.56% to $64.63.

Fed decision is today’s main event

The Fed is expected to raise rates in today’s meeting, with markets currently pricing in roughly 90% to 93% odds of that move.

Traders are focused less on the rate move itself, which appears largely priced in, and more on Fed Chairman Kevin Warsh’s comments at his press conference this afternoon, along with the updated “dot plot” showing officials’ expectations for future rate moves.

Retail sales data beat expectations

August retail sales data along with the NAHB housing market index was also released today.

Retail sales rose 1.2% in August, well above the 0.7% increase markets had expected.

The so-called “control group” component of retail sales, considered the best indicator of future consumer spending power, rose even more sharply, up 1.4%.

Both readings mark the last major hard data releases ahead of today’s Fed meeting.

Oil slips on a large inventory build

WTI crude futures slipped in early trading after a reported 7.1 million-barrel build in US crude oil inventories overnight, with WTI at $102.66

Brent crude fell below $105.8 per barrel.

Even with today’s pullback, supply risks in the Gulf continue to support prices more broadly.

A Saudi East-West oil pipeline remains shut following a recent attack.

Yemen’s Iran-backed Houthi rebels have continued targeting Saudi oil infrastructure and global shipping, including a series of missile attacks on vessels in the Strait of Hormuz, a waterway through which a large share of the world’s oil supply passes.

Why gold is benefiting from both stories

The drop in oil prices is easing some of the immediate inflation fears that had helped push gold to its current record highs.

At the same time, the ongoing risk of further disruption to Gulf oil supplies is keeping a defensive bid under the metal, since investors remain wary that tensions could flare again and send energy prices back higher.

That combination, cooling inflation pressure from today’s oil pullback alongside persistent geopolitical risk, has left gold and silver both higher heading into the Fed decision.

Key levels to watch

Gold has rebounded from the $4,283 support zone and is now approaching resistance at $4,354. Silver has recovered above $64.40 and is testing the next upside area near $65.28.

The metals complex remains sensitive to Warsh’s tone.

If the Fed presents today’s expected rate hike as a limited response to oil-driven inflation, gold and silver could extend their recovery.

However, if updated projections point to a broader tightening cycle, the dollar and Treasury yields could regain influence over precious metals.

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