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• Silver price gauges an interim cushion near $22.50, more downside looks likely as Fed rate cut bets ease.
• Strong US consumer spending has dented hopes of rate cut by the Fed in March.
• Silver price hovers near the horizontal support of the descending triangle chart pattern.

Silver price (XAG/USD) discovers an intermediate support after a sharp correction to nearly $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 a further decline in the risk appetite of the market participants. The US Dollar Index (DXY) has corrected to near 103.25 after failing to extend a rally above a 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 the 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 to maintain a ‘careful and methodical’ approach while reducing interest rates.

Silver technical analysis

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.

Silver four-hour chart

XAG/USD

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