- Silver consolidates the recent losses to its lowest level since July 7 touched this Monday.
- The technical setup supports prospects for an extension of a multi-week-old downtrend
- A sustained move back above the $23.20-30 confluence might negate the bearish outlook.
Silver kicks off the new week on a softer note and touches a fresh low since July 7 during the Asian session, though lacks follow-through selling. The white metal now seems to have entered a bearish consolidation phase and is seen oscillating in a narrow trading band just above mid--$22.00s. The technical setup, meanwhile, remains tilted in favour of bearish traders and suggests that the path of least resistance for the XAG/USD is to the downside.
Against the backdrop of the recent decline witnessed over the past three weeks or so, the subdued range-bound price action might still be categorized as a bearish consolidation phase. Moreover, last week's breakdown through a short-term ascending trend line extending from June swing low and the very important 200-day Simple Moving Average (SMA) adds credence to the bearish outlook for the XAG/USD. This, along with the fact that technical indicators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone, supports prospects for a further depreciating move.
Hence, a subsequent slide back towards retesting the multi-month low, around the $22.15-$22.10 area touched in June, looks like a distinct possibility. Some follow-through selling below the $22.00 mark will expose the $21.55-$21.50 intermediate support and the $21.00 mark. The downward trajectory could get extended towards the $21.00 round figure en route to the YTD low, or levels just below the $20.00 psychological mark touched in March.
On the flip side, attempted recovery back towards the $23.00 round figure might still be seen as a selling opportunity and remain capped near the $23.20-$23.30 confluence support breakpoint, now turned resistance. The latter should act as a pivotal point, which if cleared decisively might trigger a short-covering move. The XAG/USD might then accelerate the recovery momentum towards the $23.60-$23.65 horizontal barrier before aiming to reclaim the $24.00 mark.
Silver daily chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD mildly down ahead of US inflation data
The AUD/USD saw some losses on Monday against the USD, which still remains weak after last week's data, which fueled dovish expectations for the Federal Reserve. With the pair maintaining its highest level since early January, the upside for the Aussie is limited by strong data reported last week.
EUR/USD faces initial up-barrier near 1.0850
EUR/USD halted its multi-day advance on Monday, facing some renewed downward pressure after faltering around the 1.0850 region on the back of the resurgence of the buying interest in the Greenback.
Gold price plummets as US yields drop and China stops bullion buying
The Gold price made a U-turn on Monday, trimming some of last Friday's gains and tanking more than 1% as risk appetite returned. US equities posted gains, while US Treasury bond yields edged lower. The XAU/USD trades around $2,358 after hitting a daily high of $2,391.
Here's what's happened in Solana today
Solana kicked off the new week with a lot of action on Monday after Cboe filed VanEck and 21Shares' Solana ETF application. Meanwhile, SOL surpassed Ethereum and Arbitrum in 24-hour decentralized exchange volume due to increased trading on the Raydium protocol.
Euro and Pound do good job absorbing political risk
A political gridlock in France and strong reassurances from the incoming UK government seem to have been enough to keep the Euro and Pound supported into this latest rally. Currencies have been better bid across the board, mostly on the back of a fresh wave of US Dollar selling.