Silver Price Analysis: XAG/USD plummets and US yields rebound in a data-packed week

• The price of Silver plummets to around $23.15 as interest in bullion moderates pending the FOMC Minutes.
• Investors Reconsider Fed Rate Cut Bets Amid Strong U.S. Economic Outlook
• Silver is likely to continue falling amid a breakout of the head and shoulder pattern.

The price of the Silver (XAG/USD) fell vertically to around $23.15 as investors rushed for safe-haven assets in the New York session. The white metal is subject to sharp declines by market participants, as investors have begun to reconsider their bets in favor of an early rate reduction by the Federal Reserve (Fed).

The S&P 500 is expected to open weakly, reflecting a significant decline in the risk appetite of market participants. The Dollar Index (DXY) has bounced and is nearing its two-week high around 102.55 as investors remain cautious ahead of the FOMC and Manufacturing PMI minutes. of the United States that the Institute for Supply Management (ISM) will report by December.

According to CME's Fedwatch tool, the odds of the Fed cutting interest rates by 25 basis points (bps) to 5.00-5.25% at the March policy meeting have fallen to 65% from 72%. on Tuesday.

Investors have reconsidered the Fed's early bets on rates as they mull the resilience of the US economic outlook, which could delay the “rate cut” campaign.

In terms of economic data, investors are awaiting the US ISM Manufacturing PMI, which is forecast to rise to 47.1 from the previous reading of 46.7.

XAG technical analysis

The price of silver experiences a sharp drop after the breakout of the head and shoulders chart pattern formed on a four-hour scale. The Relative Strength Index (RSI) (14) has moved towards the bearish range of 20.00-40.00, indicating that bearish momentum has been triggered.

Silver 4-hour chart