Silver Price Analysis: XAG/USD clings to gains near mid-$18.00s, not out of the woods yet

Silver gains some positive traction on Tuesday and for now, seems to have snapped a two-day losing streak. The white metal held on to the modest intraday gains through the early European session and was last seen hovering near the daily high, around mid-$18.00s.

Looking at the broader picture, the XAG/USD has been oscillating in a familiar range over the past one-and-a-half week or so. Given the recent fall from mid-$22.00s or the June monthly high, the rangebound price moves could be categorized as a bearish consolidation phase.

Adding to this, repeated failures near the $19.00 round figure suggest that the near-term selling bias might still be far from being over. Furthermore, oscillators on the daily chart are holding deep in the bearish territory and add credence to the negative outlook.

Hence, any subsequent move up might still be seen as a selling opportunity near the $19.00 mark. Some follow-through buying has the potential to lift the XAG/USD further, though the momentum is likely to remain capped near the $19.40-$19.50 heavy supply zone.

On the flip side, the YTD low, around the $18.20-$18.15 region, is likely to protect the immediate downside ahead of the $18.00 mark. A convincing break below would be seen as a fresh trigger for bearish traders and set the stage for a further depreciating move.

The XAG/USD could then accelerate the downfall towards the $17.45-$17.40 intermediate support en-route to the $17.00 mark. The bearish trend could get extended and spot prices could eventually drop to test the next relevant support near the $16.70-$16.60 region.

Silver 4-hour chart

Key levels to watch