- Silver reverses an intraday dip and moves back closer to the YTD peak on Tuesday.
- The technical setup favours bullish traders and supports prospects for further gains.
- Sustained weakness back below the $23.00 mark will negate the positive outlook.
Silver (XAG/USD) attracts some dip-buying near the $23.65-$23.60 region on Tuesday and flirts with the YTD peak during the first half of the European session. The white metal currently trades just below the $24.00 mark and looks to build on the previous day's breakout momentum through the $23.30-$23.35 confluence hurdle.
The latter comprises the 100- and the 200-day Simple Moving Averages (SMA), which should now act as a key pivotal point for the XAG/USD. Any meaningful corrective slide is more likely to get bought into near the said resistance-turned-support and remain limited near the $23.00 round figure. That said, some follow-through selling will suggest that a one-week-old strong rally has run out of steam and pave the way for deeper losses.
The XAG/USD might then accelerate the slide towards the $22.50-$22.45 intermediate support before eventually dropping to sub-$22.00 levels or the two-month trough touched in January and retested in February. The downward trajectory could extend further and drag the white metal further towards the next relevant support near the $21.40-$21.35 region. That said, positive oscillators on the daily chart warrant caution for bearish traders.
On the flip side, momentum beyond the $24.00 mark is likely to confront some resistance near the $24.30-$24.35 region ahead of the $24.50 supply zone. A sustained strength beyond should allow the XAG/USD to reclaim the $25.00 psychological mark and climb further towards the $25.45-$25.50 intermediate hurdle en route to the $26.00 neighbourhood, or the December 2023 swing high.
Silver daily chart
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