Silver price (XAG/USD) nosedived to near $22.00 on Monday, more than 2.5% down from its previous close. The white metal is heavily dumped by the market participants as trades dialled back expectations of early rate cuts by the Federal Reserve (Fed).
The S&P500 is expected to open on a positive note, considering positive cues from the overnight futures. The US Dollar Index (DXY) is also facing pressure despite investors have postponed their expectations of rate cut from Fed to May. 10-year US Treasury yields have dropped further to near 4.09%.
The CME Fedwatch tool indicates that investors are now anticipating an interest rate cut in May as price pressures are still stubborn due to robust households’ spending and upbeat labor market conditions.
This week, market participants will focus on the United States Q4 Gross Domestic Product (GDP) data, which will be published on Thursday. An upbeat GDP data would underscore the ‘higher interest rates’ narrative. Fed policymakers have been considering early rate cuts as premature that could dampen all efforts yet don to tame price pressures.
Silver price witnesses an intense sell-off after delivering a breakdown of the horizontal support plotted from December 13 low at $22.51. The asset is expected to find an interim support near November 13 low at $21.88. The 50-period Exponential Moving Average (EMA) near $22.80 continues to act as a barricade for the Silver price bulls.
The 14-period Relative Strength Index (RSI) has shifted into the bearish range of 20.00-40.00, which indicates that a downside momentum has been triggered.