Silver Price Analysis: XAG/USD seems vulnerable, break below $25.00 mark awaited

  • Silver attracted some buying near the $25.00 mark, though struggled to register any strong recovery.
  • The set-up remains tilted in favour of bearish traders and supports prospects for additional losses.
  • A sustained move beyond the overnight swing highs is needed to negate the near-term negative bias.

Silver found some support near the 61.8% Fibonacci level of the $24.50-$26.00 positive move and edged higher from the vicinity of the key $25.00 psychological mark. The uptick, however, lacked any strong follow-through buying and the commodity, so far, has struggled to register any meaningful recovery.

From a technical perspective, the overnight sustained break below the 200-hour SMA and the 50% Fibo. level was seen as a fresh trigger for bearish traders. This further seems to have set the stage for an extension of this week’s rejection slide from the $26.00 mark, or multi-week tops touched on Tuesday.

The outlook is reinforced by the fact that technical indicators on hourly/daily charts, which have been gaining negative traction and are still far from the oversold zone. However, it will be prudent to wait for some follow-through selling below the $25.00 mark before placing fresh bearish bets.

The XAG/USD might then accelerate the slide back towards July monthly swing lows, around mid-$24.00s. The downward trajectory could further get extended and drag the white metal back towards the $24.00 mark before bears aim to challenge YTD lows, around the $23.80-75 region touched in March.

On the flip side, the 50% Fibo. level, around the $25.25 region, now seems to act as an immediate resistance ahead of 200-hour SMA. A sustained move beyond might trigger a short-covering move and push the XAG/USD back towards the overnight swing highs, around mid-$25.00s.

Silver 1-hour chart

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Technical levels to watch

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