Silver closes higher, shrugs off rising dollar

Silver prices rose on Wednesday, and shrugged of the US dollar's rise against most major currencies, following the US Federal Reserve’s rate decision.

The US Federal Reserve decided to hold the interest rate between zero and 0.25% unchanged, and addressed the recent rise in inflation according to the recent economic data, as the Fed officials see that the rise in consumer prices is temporary.

The FOMC stated that it expects 2 interest rate hikes in 2023, and raised its forecast for US GDP growth this year to 7% from 6.5% in March.

Whilst the central bank kept its forecast for the US economy growth in 2022 at 3.3%, but raised its forecast for 2023 to 2.4% from 2.2%.

The Fed expects the personal consumption expenditures index (which the Fed uses to measure inflation) to rise by 3.4% in 2021 from 2.4%, and raised its forecast for 2022 and 2023 to 2.1% and 2.2% respectively.

The central bank projected that the unemployment rate will fall to 4.5% this year, and lowered its forecasts for it to 3.8% in 2022 from 3.9%.

The dollar index rose against a basket of major currencies by 0.8% to 91.2 points as of 19:20 GMT, after hitting a high of 91.2 points and a low of 90.4 points.

Silver July futures rose 0.3% or 12 cents, and closed at $27.81 an ounce.