Silver Price Analysis: XAG/USD refreshes day’s low around $24.50 ahead of Fed policy

• Silver price has refreshed the day’s low marginally below $24.50 as the focus shifts to Fed’s policy.
• Investors are hoping that the Fed will raise interest rates further by 25 basis points (bps) to 5.25-5.50%.
• Silver price has slipped below the 23.6% Fibonacci retracement at $24.53.

Silver price (XAG/USD) has printed a fresh day’s low at $24.45 in the early New York session. The white metal has sensed immense pressure as bullions have come under pressure ahead of the interest rate decision by the Federal Reserve (Fed), which will be announced on Wednesday.

S&P500 is expected to start the week on a positive note, following positive cues from overnight futures. The US Dollar Index (DXY) has tested the breakout of the consolidation formed around 101.00 after printing a high of 101.41. The 10-year US Treasury yields have dropped to near 3.81%.

Investors are hoping that the Fed will raise interest rates further by 25 basis points (bps) to 5.25-5.50%. Analysts at Goldman Sachs, the Federal Reserve's widely-expected interest rate hike at its upcoming policy meeting next week will be "the last" of the US central bank's long-running tightening cycle.

But before that, preliminary United States S&P Global PMI data for July will be in focus. As per the expectations, Manufacturing PMI is seen marginally expanding to 46.4 vs. the former release of 46.3. Services PMI is seen lower at 54.1 against the former release of 54.4. A figure below 50.00 is considered a contraction in economic activities.

Silver technical analysis

Silver price has slipped below the 23.6% Fibonacci retracement (plotted from June 23 low at $22.11 to July 20 high at $25.27) at $24.53 on a two-hour scale. The 20-period Exponential Moving Average (EMA) at $24.67 is acting as a barricade for the Silver bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates that the downside momentum has been triggered.

Silver two-hour chart