Silver Price Analysis: XAG/USD sticks to gains near $23.00 mark, lacks bullish conviction

Silver (XAG/USD) builds on the previous day's goodish rebound from the vicinity of mid-$22.00s, or a multi-day low and gains some follow-through traction on Thursday. The white metal maintains its bid tone through the early part of the European session and currently trades around the $23.00 round-figure mark, up over 0.20% for the day.

The post-FOMC US Dollar (USD) selling bias remains unabated, which, in turn, is seen as a key factor driving flows towards the USD-denominated commodities, including the XAG/USD. This, along with positive technical indicators on the daily chart, supports prospects for a further appreciating move. That said, the recent repeated failures near the $23.60-$23.70 supply zone, which constitute the formation of a bearish multiple tops pattern, warrants caution for bullish traders.

In the meantime, any subsequent move up is more likely to confront stiff resistance near the very important 200-day Simple Moving Average (SMA), currently pegged around the $23.30 region. Bulls, meanwhile, need to wait for a convincing breakout through the $23.60-$23.70 barrier, before placing fresh bets. The XAG/USD might then aim to surpass the $24.00 mark and test the $24.20 hurdle before making a fresh attempt towards conquering the $25.00 psychological mark.

On the flip side, the $22.50-$22.45 region now seems to have emerged as an immediate strong support. Some follow-through selling, however, will be seen as a fresh trigger for bearish traders and drag the XAG/USD to the $22.00 mark. The downward trajectory could get extended further towards the $21.70 horizontal support en route to the $21.35-$21.30 region and the $21.00 mark. Silver could eventually drop to the $20.70-$20.65 area, or a seven-month low touched in October.

Silver daily chart

Technical levels to watch