Silver price (XAG/USD) discovers an intermediate support after a sharp correction to near $22.50 in the late Asian session. The near-term demand for the white metal is still downbeat as trades have pared bets supporting a rate cut by the Federal Reserve (Fed) in March.
S&P500 futures have posted nominal losses on board in Tokyo, portraying further decline in the risk-appetite of the market participants. The US Dollar Index (DXY) has corrected to near 103.25 after failing extend rally above fresh monthly high of 103.63. 10-year US Treasury yields have eased slightly to near 4.1%.
Investors are losing conviction towards an interest rate cut by the Fed in the march monetary policy meeting due to absence of support from United States economic indicators. After a stubborn inflation report for December, Retail Sales data outperformed the market consensus. The US consumer spending rose at a stronger pace of 0.6% against expectations of 0.4% and the prior reading of 0.3%.
Strong US Retail Sales were prompted by robust demand for motor vehicles and online purchases. Considering resilience in the US economy, Fed Governor Christopher Waller advised the need of maintaining a ‘careful and methodical’ approach while reducing interest rates.
Silver price trades near the horizontal support of the Descending Triangle chart pattern formed on a four-hour scale, which is around December 13 low of $22.50. The downward-sloping trendline of the aforementioned chart pattern is plotted from December 3 high at $25.92.
The 50-period Exponential Moving Average (EMA) around $23.00 continues to act as a barricade for the Silver price bulls.
Meanwhile, the 14-period Relative Strength Index (RSI) has slipped into the bearish range of 20.00-40.00, which indicates that a bearish momentum has been triggered.