Silver (XAG/USD) continues to face selling pressure for the second consecutive day, signaling a potential further decline in the near term. Despite trading below mid-$27.00s during the Asian session, the white metal remains range-bound within the broader range established over the past week. However, the technical setup suggests a bearish outlook, with a high likelihood of a continued downward trajectory.
On Friday, Silver failed near the 23.6% Fibonacci retracement level of the July-August downfall, followed by additional selling pressure. This reinforces the negative sentiment for XAG/USD in the short term. Furthermore, indicators on the daily chart indicate a strong bearish momentum, with ample room for further downside. A break below the $27.00 support level could lead to a retest of the multi-month low near $26.50-$26.45, potentially extending towards the $26.00 mark.
If the bearish trend persists, Silver could target intermediate support at $25.60 before approaching the psychological level of $25.00. Conversely, a break above the 23.6% Fibonacci level around $27.75 may trigger a short-covering rally, pushing XAG/USD towards $28.00 and beyond. However, any upside momentum is likely to face resistance near the 100-day Simple Moving Average (SMA) at $28.75-$28.80.
In conclusion, Silver’s price action suggests a bearish outlook in the near term, with potential support levels at $26.50 and $25.60. On the upside, resistance levels at $27.75 and $28.75 could limit any significant gains. Traders should closely monitor key levels for potential entry and exit points in line with the prevailing market sentiment.
Silver daily chart
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Silver is a precious metal highly traded among investors, offering a hedge against inflation and a diversification tool for investment portfolios. Factors such as geopolitical instability, interest rates, and USD performance influence Silver prices. Its industrial usage in sectors like electronics and solar energy also impacts price movements. Understanding the dynamics of Silver pricing can help investors make informed decisions based on market trends and global economic indicators.