- Silver remains under some selling for the second straight day and drops closer to the weekly trough.
- The technical setup favours bearish traders and supports prospects for additional near-term losses.
- A sustained strength beyond the $23.60-$23.70 supply zone is needed to negate the negative bias.
Silver (XAG/USD) drifts lower for the second successive day on Friday – also marking the third day of a negative move in the previous four – and drops to the lower end of its weekly range during the early part of the European session. The white metal currently trades around the $22.65-$22.60 region, down over 0.50% for the day, and seems vulnerable to weaken further.
The recent repeated failures to find acceptance above the 200-day Simple Moving Average (SMA) and rejections near the $23.60-$23.70 supply zone constitute the formation of a multiple tops pattern. Furthermore, technical indicators on the daily chart have again started gaining negative traction and validate the near-term bearish outlook for the XAG/USD. That said, it will still be prudent to wait for some follow-through selling below the $22.50 support zone before positioning for further losses.
The XAG/USD might then accelerate the fall to the $22.00 mark before dropping to the $21.70 horizontal support zone en route to the $21.35-$21.30 region. The downward trajectory could get extended further and drag the white metal below the $21.00 mark, towards the $20.70-$20.65 area, or a seven-month low touched in October.
On the flip side, the $23.00 round figure now seems to cap the immediate upside ahead of the $23.10-$23.15 horizontal barrier. This is closely followed by the 200-day SMA, currently around the $23.25 region, above which the XAG/USD could challenge the $23.60-$23.70 supply zone. The latter should act as a key pivotal point, which if cleared decisively will negate the negative outlook and shift the near-term bias in favour of bullish traders, paving the way for a move towards the $24.00 mark.
Some follow-through buying has the potential to lift the XAG/USD beyond the $24.20-$24.25 intermediate resistance and allow bulls to make a fresh attempt to conquer the $25.00 psychological 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
EUR/USD stays weak below 1.0500 due to risk-off mood
EUR/USD remains depressed below 1.0500 in Tuesday's European morning as US President-elect Trump’s tariff plans dampen the market sentiment and keep the US Dollar broadly bid. The Euro struggles due to growing Euro area economic concerns and increased dovish ECB bets.
GBP/USD consolidates losses near 1.2550 ahead of BoE's Pill, Fed Minutes
GBP/USD struggles near 1.2550 in European trading on Tuesday, following a slump to the 1.2500 area. The US Dollar holds on to modest gains amid Trump's tariffs threat-driven cautious mood, keeping the pair undermined ahead of BoE Pill's speech and Fed Minutes.
Gold price seems vulnerable amid bullish USD; $2,600 mark holds the key
Gold price struggles to capitalize on its modest intraday bounce from the $2,600 neighborhood, or over a one-week low and retains a negative bias for the second straight day on Tuesday. Trump's tariff threat drove some haven flows and offered some support to the safe-haven precious metal.
Trump shakes up markets again with “day one” tariff threats against CA, MX, CN
Pres-elect Trump reprised the ability from his first term to change the course of markets with a single post – this time from his Truth Social network; Threatening 25% tariffs "on Day One" against Mexico and Canada, and an additional 10% against China.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.