XAG / USD under pressure ahead of Fed, falls to 23.00
- Metals have fallen sharply so far on the Wednesday before the FOMC statement.
- US dollar gains momentum, rising slightly on better than expected US data.
- XAG / USD extends weekly losses to find support at USD 23.00.
Silver and gold fell sharply on the Wednesday ahead of the FOMC statement. XAG / USD is now outside of the lows, hovering around $ 23.25, down 1.20% for the day. It previously fell to $ 23.00, its lowest level since October 18.
The sharp decline is an extension of the decline that started last week at levels near $ 25.00. It has accelerated in the past two days as it fell from $ 24.05.
The US dollar gained some momentum on the US economic data but remains mixed across the board for the day as market participants await the outcome of the FOMC session. The Federal Reserve is expected to announce a reduction in its purchase program. Jerome Powell’s tone and words are likely to trigger volatility, including in metals.
The ADP reports showed that private payrolls rose 571,000 in October, above the expected 400,000, while the ISM services sector rose to a record high of 66.7 in October. The data boosted US yields and supported the dollar. Still, the FOMC meeting will be the key factor, at least until Friday’s NFP.
A daily close for XAG / USD below $ 22.70 would indicate renewed weakness, while a rebound above $ 24.00 should pave the way for a test of $ 25.00.