Silver Price Analysis: XAG/USD bulls retain control near multi-month peak, above $25.00
|- Silver attracted dip-buying on Tuesday and recovered a major part of the overnight losses.
- The set-up remains tilted in favour of bullish and supports prospects for additional gains.
- Dips below the $25.00 mark could still be seen as a buying opportunity and remain limited.
Silver regained positive traction on Tuesday and reversed a major part of the overnight retracement slide from a more than a three-month peak. The white metal built on its steady intraday ascent and climbed to a fresh daily top, around the $25.25 region heading into the North American session.
Looking at the broader picture, the recent strong recovery from YTD lows, around the $21.40 region touched in September, has been along an upward sloping channel. This points to a well-established short-term bullish trend and supports prospects for an extension of the appreciating move.
Apart from this, last week's sustained breakout through 100-day SMA/38.2% Fibo. confluence barrier, the $24.50 supply zone adds credence to the positive outlook. Moreover, acceptance above the 50% Fibo. level, around the key $25.00 psychological mark reaffirms the constructive set-up for the XAG/USD.
With oscillators on the daily chart holding in the bullish territory and still far from being in the overbought zone, a subsequent move towards the $25.55-60 region, en-route the $26.00 mark, remains a distinct possibility. The latter coincides with the 61.8% Fibo. and should act as a strong barrier.
On the flip side, any meaningful corrective pullback might continue to attract some dip-buying near the $25.00 mark. This, in turn, should help limit the downside near the $24.50 resistance breakpoint. Failure to defend the mentioned support could drag the XAG/USD towards the $24.00 round-figure mark.
Silver daily chart
Technical levels to watch
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