- Silver witnessed fresh selling on Monday and dropped to over a one-week low.
- The downtick found support near the $25.00 mark, or the 38.2% Fibo. level.
- Bullish oscillators warrant caution before positioning for any further losses.
Silver came under heavy selling pressure on Monday and extended last week's retracement slide from the vicinity of the $27.00 mark or the highest level since June 2021. The XAU/USD dropped to over a one-week low, though managed to find some support ahead of the key $25.00 psychological mark.
The said handle represents the 38.2% Fibonacci retracement level of the $22.00-$26.95 strong move up and should act as a pivotal point. A convincing break below will be seen as a fresh trigger for bearish traders and set the stage for a further near-term depreciating move for the XAG/USD.
That said, technical indicators on the daily chart - though have been losing some positive traction - are still holding in the bullish territory. This, in turn, warrants some caution and makes it prudent to wait for sustained weakness below the aforementioned handle before placing fresh bets.
The XAG/USD could then accelerate the downward trajectory towards testing the 50% Fibo. level, near mid-$24.00s. This is followed by support near the $24.25 horizontal zone, which if broken would make spot prices vulnerable and expose sub-$24.00 levels, or the 61.8% Fibo. level.
On the flip side, the 23.6% Fibo. level, around the $25.75-$25.80 region, might now cap the immediate upside ahead of the $26.00 round-figure mark. Some follow-through buying would negate the near-term bearish bias and lift the XAG/USD further towards the $26.40 intermediate resistance.
Bulls could eventually make a fresh attempt to conquer the $27.00 mark and push the XAG/USD further towards the next relevant hurdle near mid-$27.00s. The positive momentum could further get extended towards the $28.00 mark en-route the May 2021 daily closing high, around the $27.90 area.
Silver daily chart
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Key levels to watch
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