Silver Price Analysis: XAG/USD sits near multi-week top, flirts with $24.35-40 barrier

Silver retests a three-week high on Tuesday, albeit struggles to capitalize on the move and remains below the $24.35-$24.40 area through the early European session.

The said hurdle might now act as a pivotal point, which if cleared decisively will set the stage for an extension of the recent rally from the $22.20 area, or the lowest level since June 23 touched earlier this month. Given that technical indicators on the daily chart have just started gaining positive traction, the XAG/USD might then aim to surpass the $24.55-$24.60 intermediate barrier and reclaim the $25.00 psychological mark. The positive move could get extended further towards the $25.25 zone, or the July monthly swing high, en route to the $26.00 round figure.

On the flip side, the $24.00 mark is likely to protect the immediate downside ahead of the 200-period Simple Moving Average (SMA) on the 4-hour chart, currently pegged around the $23.85 region. A sustained break below might prompt some technical selling and drag the XAG/USD towards the $23.55 region. This is closely followed by support near the $23.40 area, representing the 200-day SMA, which if broken decisively might shift the near-term bias in favour of bearish traders and pave the way for a further downside towards testing sub-$23.00 levels.

Silver 4-hour chart

Any subsequent decline will expose the $22.20-$22.10 support zone. The latter represents the neckline of a bearish head and shoulders pattern formation on the daily chart. Hence, a convincing break below will set the stage for a meaningful decline.

XAG/USD daily chart

Technical levels to watch