Silver is sinking into support on hawkish Fed

• Silver, XAG/USD is under pressure as US Dollar rallies.
• Federal Reserve Powell strikes an uber-hawkish tone to Congress. 

Silver has dropped like the heavyweight that it is, breaking through a couple of layers of key support following uber rhetoric from the Federal Reserve's chairman, Jerome Powell on Tuesday. At the time of writing, Silver, or XAG/USD, is down some 4.26% after falling from a high of $21.1412 to a low of $20.0853. 

In remarks to Congress, Federal Reserve's chair Jerome Powell said that the US central bank will stay the course until the job is done. He also said that the ultimate level of interest rates is likely to be higher than previously anticipated, adding that the Fed is and will be prepared to increase the pace of rate hikes if data indicates it is warranted:

 "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."

Meanwhile, Fed funds futures traders have now raised bets that the Fed will hike rates by 50 basis points at its March 21-22 meeting to 56% and a 25 basis points increase is now seen as just a 44% likelihood. Traders are now also pricing for the rate to peak at 5.57% in September and the US Dollar is firmly bid as result.

As a consequence, the DXY index, a measure of the US Dollar vs. a basket of currencies, vaulted 105 the figure in a move that started out from 104.43 and kept going until 105.435. The yield on the US 10-year Treasury note rose to 4% before easing back to 3.96%, remaining marginally below the three-month high of 4.07% touched on March 2nd as investors assessed the pace of future rate hikes by the Federal Reserve.