XAG/USD stabilizes after a sell-off above $24 as US PCE softens further

• Silver finds stabilization after a sell-off to near $24.00 amid strength in the US Dollar.
• The US core PCE price index gained at a pace of 0.2% in June as expected by the market participants.
• Silver price delivers a breakdown of the Double Top chart pattern formed above $25.00.

Silver price (XAG/USD) remains topsy-turvy above the crucial support of $24.00 in the New York session. The white metal struggles to find direction as investors need strong cues about September’s monetary policy by the Federal Reserve (Fed) as policymakers held incoming data accountable for further action.

S&P500 opens on a bullish note as fears of a recession in the United States have faded significantly. Considering the stellar performance of the US economy in the April-June quarter and commentary from Fed officials that they are not expecting a recession due to the tight labor market, investors find strength for pumping money into US equities.

The US Dollar Index (DXY) rebounds firmly after correcting to near 101.40 as soft US core Personal Consumption Expenditure (PCE) price index data fails to offset the impact of upbeat Gross Domestic Product (GDP) data.

The US core PCE price index gained at a pace of 0.2% in June as expected by the market participants but remained slower than the 0.3% figure, being registered in May. On an annualized basis, Federal Reserve’s (Fed) preferred inflation tool softened sharply to 4.1% vs. the expectations of 4.2% and the former release of 4.6%.

Silver technical analysis

Silver price delivers a breakdown of the Double Top chart pattern formed above $25.00 on a two-hour scale. The aforementioned pattern was triggered after slipping below July 24 low at $24.27 and a bearish reversal has been triggered. The 20-period Exponential Moving Average (EMA) at $24.40 is acting as a barricade for the Silver bulls.

The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the bearish momentum is active.

Silver two-hour chart