XAG/USD nosedives as US yields rally in a data-packed week

• Silver price plunges to near $23.15 as appeal for bullions fade ahead of FOMC minutes.
• Investors reconsider Fed’s rate cut bets amid robust US economic prospects.
• More downside in Silver is likely amid a H&S breakdown.

Silver price (XAG/USD) fell vertically to near $23.15 as investors rush for safe-haven assets in the early New York session. The white metal is heavily dump by the market participants as investors have started reconsidering their bets in favour of early rate cuts by the Federal Reserve (Fed).

The S&P500 is expected to open on a weak note, portraying a significant decline in the risk-appetite of the market participants. The US Dollar Index (DXY) has rebounded to near its two-week high around 102.55 as investors turn cautious ahead of the Federal Open Market Committee (FOMC) minutes and the United States Manufacturing PMI to be reported by the Institute of Supply Management (ISM) for December.

As per the CME Fedwatch tool, chances for the Fed reducing interest rates by 25 basis points (bps) to 5.00-5.25% in the March monetary policy meeting have dropped to 65% vs. 72% recorded on Tuesday.

Investors have reconsidered Fed’s early rate bets as they mulls over resilient US economic prospects, which could delay ‘rate-cut’ campaign.

On the economic data front, investors await the US ISM Manufacturing PMI, which is seen higher at 47.1 vs. the former reading of 46.7.

Silver technical analysis

Silver price witnesses a steep fall after a breakdown of the Head and Shoulder chart pattern formed on a four-hour scale. The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that a bearish momentum has been triggered.

Silver four-hour chart