Silver Price Analysis: XAG/USD plunges to multi-month low, fast approaching $22.00 mark

• Silver witnessed heavy follow-through selling on Monday and dived to a near three-month low.
• Last week’s break below the 200-DMA and ascending trend-line was seen as a key trigger for bears.
• Extremely oversold RSI makes it prudent to wait for some consolidation before the next leg down.

Silver extended a three-week-old bearish trend and witnessed some follow-through selling for the eighth successive day on Monday. This also marked the ninth day of a negative move in the previous ten and dragged spot prices to the $22.00 neighbourhood, or a near three-month low during the early North American session.

Looking at the broader picture, last week's sustained breakthrough the very important 200-day SMA and an ascending trend-line extending from December 2021 was seen as a fresh trigger for bearish traders. A subsequent slide below the $22.65 static support aggravated the bearish pressure and contributed to the downfall.

That said, RSI (14) on the daily chart is already flashing extremely oversold conditions and warrants caution for aggressive traders. This makes it prudent to wait for some near-term consolidation or modest bounce back towards the $22.65 area before positioning for an extension of the ongoing downward trajectory.

Hence, any further decline is more likely to pause near the $22.00 round-figure mark. That said, a convincing break below should pave the way for additional losses and expose the next relevant support near the $21.45-$21.40 region, or the December 2021 swing low.

On the flip side, attempted recovery back above the $22.65 region could be seen as a fresh selling opportunity near the $23.00 round figure. This, in turn, should cap the upside for the XAG/USD near the aforementioned ascending trend-line support breakpoint, now turned resistance near the $23.20 area.

Silver daily chart

Key levels to watch