• Silver rises despite a still restrictive monetary environment.
• Markets shift expectations toward higher interest rates for longer in the US.
• Geopolitical tensions and rising energy prices sustain inflationary pressures.

Silver (XAG/USD) trades around $76.00 on Friday at the time of writing, up 3.05% on the day, supported by renewed demand despite a macroeconomic backdrop that remains challenging for non-yielding assets.

The white metal benefits from a rebound after consolidating earlier in the week, as investors reassess the outlook for monetary policy in the United States (US). The Federal Reserve (Fed) kept interest rates unchanged within the 3.5%-3.75% range at its latest meeting, a decision widely expected by markets. However, internal divisions within the committee, with several members opposing an easing bias, reinforce the view that restrictive policy may persist for longer.

Market expectations, as reflected by the CME FedWatch tool, now point to a high chance of rates remaining unchanged through year-end, with even some prospects of tightening further out. In this context, non-yielding assets such as Silver typically see their upside limited due to the higher opportunity cost of holding them.

At the same time, global inflationary pressures remain a key driver. Rising energy prices, fueled by tensions in the Middle East, are reviving concerns about de-anchored inflation expectations. This dynamic is prompting major central banks, including the Fed, the European Central Bank (ECB) and the Bank of England (BoE), to maintain a cautious, data-dependent stance with an overall hawkish tilt.

Recent comments from Fed officials highlight this approach. Policymakers such as Lorie Logan and Neel Kashkari have pointed to the possibility of policy moves in either direction, while emphasizing that a significant price shock could require further tightening to preserve credibility around the inflation target.

Against this backdrop, Silver is navigating a mixed environment, caught between headwinds from elevated interest rates and structural support from safe-haven demand and its role as an inflation hedge.