Silver Price Analysis: XAG/USD sticks to gains above $24.00, bulls have the upper hand
- Silver catches fresh bids on Tuesday and recovers a major part of the overnight losses.
- The technical setup favours bullish traders and supports prospects for additional gains.
- A convincing break below the 200-hour SMA is needed to negate the constructive setup.
Silver regains strong positive traction on Tuesday and reverses a major part of the previous day's slide to sub-$23.00 levels. The white metal maintains its bid ton through the first half of the European session and is currently placed near the top end of its daily trading range, around the $24.20 region, up over 0.50% for the day.
From a technical perspective, the XAG/USD, for now, seems to have stalled its retracement slide from its highest level since May 11 touched on Friday. Meanwhile, oscillators on the daily chart are holding in the bullish territory and have again started gaining positive traction on hourly charts. This, in turn, supports prospects for a further appreciating move and move towards retesting the $24.50-$24.55 resistance zone, representing the 50% Fibonacci retracement level of the downfall witnessed in May.
Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for the resumption of a nearly three-week-old upward trajectory, from the $22.70-$22.65 area, or a two-month low touched in May. The XAG/USD might then aim to reclaim the $25.00 psychological mark and accelerate the positive momentum further towards the $25.35-$25.40 hurdle. Bulls might then make a fresh attempt towards conquering the $26.00 round figure.
On the flip side, the 38.2% Fibo. level, around the $24.00 mark, also representing a strong horizontal barrier breakpoint, should protect the immediate downside. This is closely followed by the overnight swing low, around the $23.90-$23.85 region, nearing the 200-hour Simple Moving Average (SMA), which should now act as a pivotal point. A convincing break below the latter will expose the 23.6% Fibo. level, around mid-$23.00s. before the XAG/USD drops to the monthly low, around the $23.25 region.
Silver 1-hour chart
Key levels to watch