Silver Price Analysis: XAG/USD drops to multi-week low, remains vulnerable below $19.00

• Silver turns lower for the sixth successive day and drops to a nearly four-week low.
• Acceptance below the 61.8% Fibo. level and the $19.00 mark favour bearish traders.
• Attempted recovery moves could be seen as a selling opportunity and remain capped.

Silver meets with a fresh supply near the $19.15 area on Monday and turns lower for the sixth straight day. The white metal drops to a nearly four-week low during the early European session and is now looking to prolong the slide further below the $19.00 mark.

From a technical perspective, the emergence of fresh selling near the 61.8% Fibonacci retracement level of the July-August move and a subsequent break below the aforementioned handle favour bearish traders. Furthermore, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, in turn, supports prospects for a further near-term depreciating move for the XAG/USD.

Hence, some follow-through weakness towards testing the next relevant support, around the $18.45-$18.40 area, now looks like a distinct possibility. The downward trajectory could further get extended and the XAG/USD could eventually drop back to challenge the YTD low, around the $18.15 zone touched in July. This is closely followed by the $18.00 round-figure mark, which if broken decisively should pave the way for an extension of the downfall.

On the flip side, recovery beyond the daily swing high, around the $19.15 region (61.8% Fibo. level), might now be seen as a selling opportunity and remain capped near the $19.40-$19.50 area. The latter marks a static support breakpoint and coincides with the 50% Fibo. level. This, in turn, should act as a pivotal point, above which a bout of a short-covering move could allow the XAG/USD to aim back to reclaim the $20.00 psychological mark.

Silver daily chart

Key levels to watch