SILVER PRICE ANALYSIS: XAG/USD JUMPS TO NEAR $23.50 AS US DOLLAR CORRECTS AHEAD OF FED POLICY

Silver price strengthens as US Dollar corrects sharply ahead of the Fed policy.

The Fed is expected to keep interest rates unchanged but may deliver a hawkish interest rate outlook.

Silver price climbs strongly above the 38.2% Fibonacci retracement around $23.34.

Silver price (XAG/USD) climbs to near $23.50 after delivering a breakout of the back-and-forth trades in the early New York session. Earlier, the white metal remained rangebound as investors sidelined ahead of the monetary policy by the Federal Reserve (Fed).

The S&P500 opens on a slightly bullish note ahead of the Fed monetary policy. The Fed is widely anticipated to keep interest rates unchanged at 5.25-5.50% as core inflation is consistently falling while the economy remains resilient.

Analysts at ANZ expect the FOMC will keep rates steady and maintain its tightening bias. There is evidence that both inflation and labor market pressures are easing, but considerable further progress is needed. We expect the FOMC will upwardly revise its 2023 and 2024 GDP forecasts. This could imply a slower speed of normalization in the Fed’s dual mandate, requiring rates to stay higher for longer.

The US Dollar Index (DXY) extends its correction below the crucial support of 105.00 as bets for neutral interest rate policy from the Fed deepen. Meanwhile, 10-year US Treasury yields dropped sharply to near 4.32%. A surprise discussion about rate cuts from Fed policymakers might shoot demand for US equities and weaken the appeal for the US Dollar