US Fed meeting: Gold-silver ratio hits 102; is it the right time to buy gold, or silver ?EXPLAINED
US Fed meeting 2025: Gold prices declined on Wednesday due to reduced demand for safe-haven assets, driven by growing optimism over U.S.-China trade negotiations, ahead of the Federal Reserve's policy announcement later in the day.
As of 0628 GMT, spot gold was down 1.2% at $3,389.37 per ounce, after rising nearly 3% on Tuesday.
Investor focus is on the upcoming Federal Open Market Committee (FOMC) meeting, where the Federal Reserve is anticipated to maintain current interest rates, with Chair Jerome Powell set to speak afterward.
Markets are estimating in a total of 80 basis points in rate cuts this year, beginning in July.
'With the US Fed meeting tomorrow, markets are eager for indications regarding rate cuts or monetary policy easings, which could affect both gold and silver. If the Fed indicates taking cuts, gold would likely stay strong, but silver will likely take on a greater role, as the interplay between industrial and precious metals comes into play,' said Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL).
The gold and silver ratio has reached 102, which implies that gold is much more expensive compared to silver, and history says silver is underpriced compared to gold.
Investors employ this ratio to consider which metal might generate superior upside potential. Often, a larger ratio indicates silver can outperform should there is a reversal.
'Gold and silver are at a crucial point, just a day before the Fed reveals its decision. Gold has bounced back impressively, gaining back about $150 in just two days. The gold-silver ratio hit 102, but that's still lower than the recent 105 level we saw in early April after Trump's reciprocal tariff remarks,' said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.
Experts believe that its tough to call where gold and silver price are headed right now due to several recent geopolitical developments, including rising tensions between India and Pakistan, and renewed conflict between Israel and Gaza.
'If gold can hold above $3420 (spot), we might be looking at a strong rally—possibly 5–7% higher. On the downside, only a drop below $3280 would signal fresh weakness. Silver's still lagging, largely because industrial metals are weak. For traders, $34.50 is the key level for silver—get a close above that, and we could see it push toward $36.40 or even $37.80,' Kalantri added.
According to Prithviraj Kothari of RSBL, silver currently has has more risk-reward potential right now. ' If you are a long-term investor or an investor who prefers a higher growth potential, silver has more risk-reward potential right now. But gold is the better choice as a stable investment and a safe-haven. Generally, diversifying into both investments, gold and silver, with a tilt towards silver, may be wise at this stage,' he added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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