No rush for rate cuts - Fed (Silver Price declines toward $22.70)

As the Federal Reserve dismisses expectations of March rate cuts, silver prices (XAG/USD) face a sell-off and drop to a weekly low near $22.70. While the Fed left interest rates unchanged within the anticipated range of 5.25-5.50%, it postponed any prospects of rate reductions in March. This move by the Fed, led by Jerome Powell, has caused a divide in the markets, with equities and risk-perceived currencies taking divergent paths.

The absence of a clear timeframe for rate cuts in the monetary policy statement has weighed on risk-perceived currencies while boosting the US Dollar Index (DXY). The DXY rallies near 103.80 as the Fed emphasizes the need for greater confidence in the sustainable return of inflation to its 2% target before considering rate cuts.

Investors are now looking to the Institute of Supply Management (ISM) Manufacturing PMI for December, scheduled for release at 15:00 GMT. Consensus estimates project a decline in the Manufacturing PMI to 47.0 from its previous reading of 47.4. Moving forward, the focus shifts to the Nonfarm Payrolls (NFP) data for January, to be announced on Friday.

The ADP Employment Change data, released earlier in the week, has set a weak foundation for the official labor market data, with US employers hiring only 180K job seekers, significantly lower than previous payroll additions of 216K. The Unemployment Rate is anticipated to rise to 3.8% compared to December's 3.7% reading.

From a technical analysis perspective, silver has formed an Evening Star candlestick pattern on a daily timeframe, signaling a potential bearish reversal. The inability to maintain levels above the 20-day Exponential Moving Average (EMA) near $23.00 adds to the bearish outlook. Meanwhile, the 14-period Relative Strength Index (RSI) fluctuates between 40.00 and 60.00, indicating a sideways trend.