Silver Price Analysis: Pulls back from two-month high, bullish potential seems intact

Silver kicks off the new week on a weaker note and for now, seems to have snapped a three-day winning streak to the $25.00 psychological mark, or its highest level since May 11 touched on Friday. The white metal remains on the defensive through the early European session and is currently placed around the $24.75-$24.80 region, down nearly 0.70% for the day, though any meaningful downside seems elusive.

Against the backdrop of the recent goodish rebound from the vicinity of the $22.00 mark, or a three-month low touched in June, Friday's sustained breakout through the $24.50-$24.60 congestion zone was seen as a fresh trigger for bullish traders. This, along with bullish technical indicators on the daily chart, validates the positive outlook for the XAG/USD and supports prospects for the emergence of some dip-buying.

Hence, any subsequent slide is more likely to find decent support near the $24.50 region, which if broken might prompt some technical selling and drag the XAG/USD towards testing the $24.00 mark. This is followed by supports near the $23.65-$23.60 area and the $23.20-$23.15 zone. A convincing break below the $23.00 round figure will negate the positive outlook and shift the bias in favour of bearish traders.

On the flip side, bulls might now wait for acceptance above the $25.00 mark before positioning for any further gains towards the next relevant hurdle near the $25.50-$25.55 region. The upward trajectory could get extended further towards reclaiming the $26.00 round figure before the XAG/USD challenges the YTD peak, around the $26.10-$26.15 region touched in May.

Silver daily chart

Key levels to watch