Silver prices are struggling to capitalize on their modest intraday gains to the $22.00 neighbourhood as the recent breakdown through key technical levels supports the prospects for further losses. For silver to negate the bearish outlook, a sustained move above the $22.55-$22.60 area is needed.
On Friday, silver prices bounced from the $21.20-$21.15 area, or its lowest level since November 29, and attracted some buyers on the first day of a new week. However, the intraday uptick lacked bullish conviction and failed just ahead of the $22.00 round-figure mark.
From a technical perspective, the said handle represents the 100-day Simple Moving Average (SMA) support breakpoint. This is followed by the 38.2% Fibonacci retracement level of the recent rally from October 2022, around the $22.15 region. Any subsequent move up is more likely to meet with a fresh supply and remain capped near the $22.55-$22.60 resistance zone.
The latter should act as a pivotal point, which if cleared decisively will negate any near-term bearish bias. The subsequent move up has the potential to lift the XAG/USD towards the $24.00 round-figure mark en route to the $24.50 supply zone. Some follow-through buying will shift the bias back in favour of bullish traders and pave the way for additional gains.
On the flip side, the 50% Fibo. level, around the $21.35 area, seems to protect the immediate downside. This is followed by Friday’s swing low, around the $21.20-$20.15 region, nearing the 50% Fibo. level. A convincing break below the latter will be seen as a fresh trigger for bearish traders and make the XAG/USD vulnerable to weaken further below the $21.00 mark.
Given that technical indicators on the daily chart are holding deep in the negative territory, the white metal could eventually drop to 61.8% Fibo., around the $20.60 region. The downward trajectory could get extended further towards challenging the $20.00 psychological mark en route to the next relevant support near the $19.75-$19.70 horizontal zone.
Overall, silver prices are struggling to capitalize on their modest intraday gains and the recent breakdown through key technical levels supports prospects for further losses. For silver to negate the bearish outlook, a sustained move above the $22.55-$22.60 area is needed. However, if this area continues to act as a strong resistance, the XAG/USD could eventually drop to 61.8% Fibo., around the $20.60 region.
The next key support to watch is the $19.75-$19.70 horizontal zone, which if broken could open the doors for a further decline towards the $18.00 support area. On the flip side, if silver prices manage to break above the $22.55-$22.60 resistance zone, the XAG/USD could gain further traction and move towards the $24.00 round-figure mark.
In conclusion, silver prices are struggling to capitalize on their modest intraday gains as the recent breakdown through key technical levels supports the prospects for further losses. To negate the bearish outlook, a sustained move above the $22.55-$22.60 area is needed. However, if this area continues to act as a strong resistance, the XAG/USD could eventually drop to 61.8% Fibo., around the $20.60 region. On the flip side, if silver prices manage to break above the $22.55-$22.60 resistance zone, the XAG/USD could gain further traction and move towards the $24.00 round-figure mark.
Silver prices have been volatile in the past few weeks, with a sharp decline from the $25.00 handle to the $21.00 handle. The breakdown through key technical levels has put bearish traders in control and the XAG/USD is currently struggling to capitalize on its modest intraday gains to the $22.00 neighbourhood. To negate the bearish outlook, a sustained move above the $22.55-$22.60 area is needed.
On the flip side, if silver prices fail to break above the $22.55-$22.60 resistance zone, the XAG/USD could eventually drop to 61.8% Fibo., around the $20.60 region. This could open the doors for a further decline towards the $19.75-$19.70 horizontal zone, followed by the $18.00 support area.
In conclusion, silver prices are currently struggling to capitalize on their modest intraday gains and the recent breakdown through key technical levels supports the prospects for further losses. To negate the bearish outlook, a sustained move above the $22.55-$22.60 area is needed. However, if this area continues to act as a strong resistance, the XAG/USD could eventually drop to 61.8% Fibo., around the $20.60 region. On the flip side, if silver prices manage to break above the $22.55-$22.60 resistance zone, the XAG/USD could gain further traction and move towards the $24.00 round-figure mark.
