Silver Price Forecast: XAG/USD gains traction to near $30.50, Fed rate decision looms

• Silver price edges higher to around $30.40 in Wednesday's Asian session. 
• The Fed is anticipated to keep interest rates on hold on Wednesday. 
• Safe-haven flows could support the Silver price. 

The Silver price (XAG/USD) trades with mild gains around $30.40 during the Asian trading hours on Wednesday. The uncertainty surrounding new tariff policies under US President Donald Trump's administration could provide some support to the precious metal. Later on Wednesday, all eyes will be on the Federal Reserve (Fed) meeting. 

The Fed interest rate decision on Wednesday will play a pivotal role in shaping the direction of Silver price. The US central bank is expected to hold its benchmark rate steady at its January meeting at its current range of 4.25%-4.50%. In December Fed Chair Jerome Powell signaled that the Fed would deliver fewer rate cuts in 2025 than it had earlier projected

However, investors will closely watch the Press Conference for more cues about the US rate outlook. If the Fed takes a wait-and-see approach to the Trump administration's policies, this could lift the Greenback and weigh on the USD-denominated commodity price in the near term. 

Additionally, China's economic growth concerns could weigh on Silver demand as China is a major consumer of silver. China's manufacturing activity unexpectedly contracted in January, its weakest since August. The country's Manufacturing Purchasing Managers' Index (PMI) contracted to 49.1 in January. This reading came in below the previous reading and market consensus of 50.1.

On the other hand, safe-haven demand amid the ongoing Russia and Ukraine conflicts could boost the white metal. Officials and media outlets reported on Wednesday that Ukrainian drones targeted oil and power facilities in western parts of Russia.