Silver Price Analysis: XAG/USD struggles near one-month low, around $18.60-50 zone

Silver continues losing ground for the second successive day on Monday and drops to over a one-month low during the early European session. The white metal is currently trading around mid-$18.00s, down over 1.80% for the day and seems vulnerable to sliding further.

The XAG/USD faced rejection near the 200-hour SMA on Friday. Furthermore, acceptance below the $19.00 round-figure mark and a subsequent break through the previous monthly low, around the $18.70 region, could be seen as a fresh trigger for bearish traders.

The pair looks to have completed a bearish flag with a conservative downside target at $18.20 close to the mid-July lows. The negative outlook is reinforced by the fact that technical indicators on the daily chart are holding deep in bearish territory. That said day traders may wish to act with caution or wait for the next pullback since the RSI (14) on hourly charts is flashing oversold.

Nevertheless, overall the technical set-up supports prospects for an extension of the depreciating move towards the YTD low, around the $18.20-15 area of the July lows. This is closely followed by the $18.00 mark, which if broken will set the stage for additional losses.

On the flip side, any attempted recovery move now seems to confront resistance and attract some sellers near the $18.70 support breakpoint. This, in turn, should keep a lid on any further gains for the XAG/USD near the $19.00 round-figure mark.

The latter should act as a pivotal point, above which the XAG/USD could climb back to the 200-hour SMA hurdle, currently near the $19.30 zone. Some follow-through buying will negate the bearish outlook and trigger a fresh bout of a short-covering move.

Silver 1-hour chart

Key levels to watch