Silver Price Analysis: XAG/USD remains confined in range below $19.00 mark

Silver failed to capitalize on the overnight goodish rebound from the $18.25 area, or a multi-day low and remained below the $19.00 mark through the early European session on Friday.

Sustained strength beyond the aforementioned handle could trigger a fresh bout of a short-covering and lift the XAG/USD towards the $19.40-$19.50 strong horizontal resistance. Some follow-through buying would suggest that the white metal has formed a near-term base and pave the way for some meaningful recovery from a two-year low touched last week.

The XAG/USD could then aim back to reclaim the $20.00 psychological mark. The momentum could further get extended and push spot prices to the next relevant barrier near the $20.55-$20.60 region. The latter marks a strong horizontal support breakpoint and should act as a pivotal point, which if cleared decisively would set the stage for additional gains.

Positive technical indicators on hourly charts, meanwhile, support prospects for some intraday gains. That said, oscillators on the daily chart are still holding deep in the negative territory. This, in turn, warrants some caution for aggressive bullish traders and suggests that any meaningful move up could attract fresh selling at higher levels.

On the flip side, the $18.50 horizontal zone now seems to protect the immediate downside ahead of the overnight swing low, around the $18.25 region. This is closely followed by the YTD low, around the $18.15 area and the $18.00 mark. A convincing break below the latter would make the XAG/USD vulnerable to extending the recent downward trajectory.

The subsequent fall has the potential to drag spot prices towards the $17.45-$17.40 intermediate support en-route to the $17.00 round-figure mark. The bearish trend could further get extended and the XAG/USD could eventually drop to test the next relevant support near the $16.70-$16.60 region.

Silver 4-hour chart

Key levels to watch