Silver gains as softer dollar offsets geopolitical concerns ahead of Fed minutes

Silver prices edged higher during the early European session on Wednesday, snapping a two-day losing streak as a weaker US dollar supported the white metal ahead of the release of the Federal Reserve's June meeting minutes.

Meanwhile, gold traded in a volatile range as fresh geopolitical tensions in the Middle East lifted oil prices and renewed inflation concerns.

Silver recovers ahead of Fed minutes

Silver (XAG/USD) attracted buyers near $60.35 during the early European session, recovering from losses recorded over the previous two sessions.

The rebound came as the US dollar softened ahead of the release of the Minutes from the Federal Reserve's June 16–17 policy meeting.

Despite the recovery, geopolitical developments remained a key focus for investors.

The US military launched a new wave of strikes against Iran on Tuesday following reports of attacks on three oil tankers in the Strait of Hormuz.

The latest escalation has put the already fragile ceasefire at risk and increased concerns about global energy supplies.

Higher energy prices could add to inflationary pressures, reinforcing expectations that the Federal Reserve may keep interest rates elevated for longer.

Such an outlook could weigh on silver, which typically becomes less attractive in a higher-interest-rate environment.

According to the CME Group's FedWatch tool, traders are currently pricing in more than an 80% probability that the Federal Reserve will deliver at least one 25-basis-point interest rate hike before the end of the year.

Investor attention is now firmly on the release of the Federal Reserve's meeting later on Wednesday.

The document is expected to provide additional insight into policymakers' views on inflation, interest rates, and the broader economic outlook.

Gold caught between safe-haven demand

Gold's traditional role as a safe-haven asset faced competing market forces on Wednesday.

The precious metal fluctuated between gains and losses after renewed US strikes on Iran pushed oil prices higher, strengthened the US dollar, and revived concerns that inflation could remain persistent.

Those developments created conflicting pressures for bullion.

While geopolitical uncertainty typically boosts demand for safe-haven assets, expectations of higher inflation and elevated interest rates reduce the appeal of non-yielding assets such as gold.

Ahead of the release of the Federal Reserve's meeting minutes, traders were looking for fresh indications of how Federal Reserve Chair Jerome Powell and other policymakers are assessing inflation risks and the future path of monetary policy.

Gold prices remain volatile

Spot gold rose 0.5% to $4,125.59 an ounce by 0305 GMT after earlier falling to its lowest level since July 2.

Meanwhile, US gold futures for August delivery slipped 0.5% to $4,136.30.

The contrasting moves in silver and gold highlighted the uncertainty across precious metals markets, as investors balanced geopolitical risks against expectations for US monetary policy.