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21 Dec 2023

Silver Price Analysis: XAG/USD holds above $24.00, seems poised to appreciate further

  • Silver gains some positive traction for the third successive day on Thursday.
  • The technical setup favours bulls and supports prospects for further gains.
  • A break below an ascending trend line is needed to negate the positive bias.

Silver (XAG/USD) attracts some buyers for the third straight day on Thursday and stalls the previous day's late pullback from the vicinity of mid-$24.00s or over a two-week high. The white metal sticks to its intraday gains through the early European session and is currently placed around the $24.25-$24.30 region, up nearly 1% for the day.

Against the backdrop of the recent solid bounce from a multi-month-old ascending trend-line support, acceptance above the 200-day Simple Moving Average (SMA) and the $24.00 round figure favours bullish traders. Moreover, oscillators on the daily chart have just started gaining positive traction and suggest that the path of least resistance for the XAG/USD is to the upside.

Some follow-through buying beyond the overnight swing high, around the $24.45 zone, will reaffirm the constructive outlook and allow bulls to reclaim the $25.00 psychological mark. The momentum could get extended further towards the $25.25 hurdle en route to the $25.45-$25.50 area and the $26.00 neighbourhood, or the highest level since May touched earlier this month.

On the flip side, the $24.00 mark now seems to protect the immediate downside. Any subsequent decline is more likely to attract fresh buyers and remain limited near the 200-day SMA, around the $23.60 region. A convincing break below the latter, however, might prompt technical selling and drag the XAG/USD to the aforementioned trend-line support, currently near the $23.00 mark.

The latter should act as a key pivotal point, which if broken decisively might shift the near-term bias in favour of bearish traders. The XAG/USD might then accelerate the downfall further towards the monthly swing low, around mid-$22.00s before dropping to the $22.25 intermediate support and the $22.00 round-figure mark.

Silver daily chart

fxsoriginal

Technical levels to watch