Silver price (XAG/USD) has sensed selling pressure around $24.20 in the London session. The white metal is broadly showing a sideways action ahead of the release of the United States Consumer Price Index (CPI) and the announcement of the interest rate decision by the Federal Reserve (Fed).
S&P500 futures have accelerated their rally on hopes that the Federal Reserve (Fed) would call for a pause in the rate-hiking spell because US labor market conditions are releasing the heat and factory activities are consistently contracting for the past seven months. The risk profile is upbeat and has improved the appeal for risk-perceived assets.
Catalysts that are supporting more interest rate hikes by the Fed are persistence in core inflation and a recovery in lending activities by US commercial banks. The latest data from the Fed showed that ending and deposit activities have increased straight for three weeks by commercial banks in the week ended May 31.
Despite higher interest rates and tight credit disbursal conditions by the US commercial banks, lending activities have soared, which shows resilience in the US economy.
The US Dollar Index (DXY) has shown a sheer sell-off as the odds of a steady interest rate policy by the Fed are extremely solid. As per the CME Fedwatch tool, more than 73% of chances are in favor of a steady interest rate policy announcement.
Silver technical analysis
The silver price has faced stiff barricades near the horizontal resistance plotted from April 25 low at $25.00, which was previously acting as a support. Earlier, the asset showed a vertical sell-off after the formation of the Double Top chart pattern.
For now, the white metal has climbed above the 200-period Exponential Moving Average (EMA), which indicates that the long-term trend is still bullish.
The Relative Strength Index (RSI) (14) is struggling in keeping itself in the bullish range of 60.00-80.00.