- Silver enters a bearish consolidation phase and oscillates in a narrow range around the $20.00 mark.
- The technical setup supports prospects for an extension of the recent well-established downtrend.
- A slightly oversold RSI on the daily chart is holding back bearish traders from placing fresh bets.
Silver struggles to gain any meaningful traction and extends its sideways consolidative price move around the $20.00 psychological mark through the mid-European session on Thursday. The white metal, meanwhile, remains well within the striking distance of over a four-month low touched on Wednesday and seems vulnerable to prolonging its downward trajectory witnessed since early February.
The recent breakdown through a technically significant 200-day Exponential Moving Average (EMA) was seen as a fresh trigger for bearish traders. Furthermore, this week's sustained weakness below the $20.50-$20.40 horizontal support, which coincided with the previous YTD low, adds credence to the negative outlook. This, in turn, suggests that the path of least resistance for the XAG/USD is to the downside.
That said, Relative Strength Index (RSI) on the daily chart is hovering in the oversold territory. Moreover, repeated failures to find acceptance below the $20.00 psychological mark make it prudent to wait for near-term consolidation before placing fresh bets around the XAG/USD. Nevertheless, the metal's inability to attract any buyers suggests that the near-term descending trend is still far from being over.
Hence, a subsequent slide towards testing the $19.60 intermediate support, en route to the $19.00 round-figure mark, looks like a distinct possibility. Some follow-through selling should pave the way for a slide towards the next relevant support near the $18.80-$18.75 region before the XAG/USD eventually drops to $18.30-$18.25 horizontal zone and the $18.00 level, which should offer strong support.
On the flip side, the $20.40-$20.50 support breakpoint now seems to act as an immediate barrier. Any further recovery is likely to attract fresh sellers and remains capped near the 200-day Simple Moving Average (SMA), currently pegged just ahead of the $21.00 mark. The latter should act as a pivotal point, which if cleared decisively could lift the XAG/USD to the mid-$21.00s. Bulls
might then aim to reclaim the $22.00 mark.
Silver daily chart
Key levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rebounds from multi-week lows, trades above 1.0750
EUR/USD came under heavy bearish pressure and declined to its weakest level in three weeks below 1.0750 on Friday after the stronger-than-expected Nonfarm Payrolls data. Week-end flows, however, helped the pair erase its daily losses.
GBP/USD remains on track to snap three-week winning streak
GBP/USD recovered toward 1.2550 after coming in within a touching distance of 1.2500 in the second half of the day after Nonfarm Payrolls came in at 199,000 for November. Despite the recent rebound, the pair remains on track to snap a three-week winning streak.
Gold retreats below $2,020 as US yields push higher
Gold broke below its daily range and declined toward $2,010 with the immediate reaction to the upbeat US November jobs report. Although XAU/USD managed to recover toward $2,020, rising US Treasury bond yields triggered another leg lower.
Bitcoin price could retrace to $42,000 if US Nonfarm Payroll comes in at 180,000
Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States.
The week ahead – Fed, ECB and Bank of England rate decisions
When the Federal Reserve kept rates unchanged back in November for the second meeting in a row there was still the distinct possibility that the final meeting of 2023 would provide the possibility of one more rate rise to round off the year in line with Fed policymakers dot plot forecasts of 5.6%.