- Silver regains some positive traction on Friday and climbs to a fresh YTD top.
- The technical setup favours bulls and supports prospects for additional gains.
- Dips below the $24.50 resistance-turned-support are likely to get bought into.
Silver (XAG/USD) attracts fresh buyers following the previous day's modest slide and sticks to its gains near the YTD peak, above the $25.00 psychological mark through the early part of the European session on Friday.
From a technical perspective, the recent breakout through the very important 200-day Simple Moving (SMA) and a subsequent strength beyond the $24.50-$24.60 horizontal barrier was seen as a fresh trigger for bullish traders. This, in turn, suggests that the path of least resistance for the XAG/USD is to the upside. That said, the Relative Strength Index (RSI) on the daily chart is on the verge of breaking into overbought territory and warrants some caution.
Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for the next leg of a move-up. Nevertheless, the XAG/USD seems poised to climb further beyond an intermediate hurdle near the mid-$25.00s, towards challenging the December 2023 swing high – levels just ahead of the $26.00 round figure. Some follow-through buying should pave the way for an extension of over a two-week-old bullish trend.
On the flip side, the $24.80-$24.75 region now seems to protect the immediate downside ahead of the $24.50 horizontal resistance breakpoint. Any subsequent decline is likely to attract fresh buyers and remain limited near the $24.15-$24.10 region. Some follow-through selling below the $24.00 mark, however, might shift the bias in favour of bearish traders and drag the XAG/USD back towards the 200-day SMA support, currently pegged near the $23.35-$23.30 region.
Silver daily chart
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