Silver Price Analysis: XAG/USD could retest sub-$22.00 levels, or two-month trough

Silver (XAG/USD) attracts some sellers following an intraday uptick on Thursday and for now, seems to have stalled its modest recovery from the $22.30-$22.25 region, or a two-week low touched the previous day. The white metal trades just below the mid-$22.00s during the first half of the European session and seems vulnerable to sliding further.

The recent failure to find acceptance above the very important and significant 200-day Simple Moving Average (SMA) and the subsequent slide from a multi-week high, around mid-$23.00s touched on February 16, validates the negative outlook. Moreover, oscillators on the daily chart have just started drifting in the negative territory and support prospects for a further near-term depreciating move for the XAG/USD.

That said, it will still be prudent to wait for some follow-through selling below the overnight swing low, around the $22.30$22.25 area before placing fresh bearish bets. The XAG/USD might then accelerate the fall towards retesting sub-$22.00 levels, or a two-month low touched in January. The downward trajectory could extend further and drag the white metal to the next relevant support near the $21.40-$21.35 region.

On the flip side, the daily peak, around the mid-$22.00s, might continue to act as an immediate hurdle ahead of the $22.70-$22.75 region. This is followed by the $23.00 round-figure mark, which if cleared decisively might trigger a short-covering rally, though the momentum runs the risk of fizzling out near the 200-day SMA, currently around the $23.30 zone. This should cap the upside near the mid-$23.00, or the monthly peak.

Silver daily chart