Silver Price Analysis: XAG/USD bulls have the upper hand above $24.35-40 resistance breakpoint

• Silver drifts lower for the second straight day and retreats further from over a one-month peak.
• The technical setup favours bulls and supports prospects for the emergence of some dip-buying.
• A convincing break below the $24.00 mark is needed to negate the near-term positive outlook.

Silver extends the previous day's rejection slide from the $25.00 psychological mark, or over a one-month high and remains under some selling pressure for the second successive day on Thursday. The white metal, however, manages to recover a bit from the daily low and trade just above mid-$24.00s during the early part of the European session, down less than 0.30% for the day.

From a technical perspective, this week's breakout through the $24.35-$24.40 barrier was seen as a fresh trigger for bulls. Adding to this, oscillators on the daily chart are holding comfortably in the positive territory and still far from being in the overbought zone. This, in turn, supports prospects for the emergence of some dip-buying and suggests that the path of least resistance for the XAG/USD is to the upside. Hence, any subsequent slide below the said resistance-turned-support is more likely to find decent support and remain limited near the $24.00 round-figure mark.

The latter nears the upward-sloping 200-hour Simple Moving Average (SMA) and should act as a strong base for the XAG/USD. Sustained weakness below, however, might prompt some technical selling and drag the white metal further 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 fall towards retesting sub-$23.00 levels en route to the $22.20 area, or the lowest level since June 23 touched earlier this month.

On the flip side, the $24.70 region could act as an immediate resistance ahead of the $25.00 mark. Some follow-through buying has the potential to lift the XAG/USD further beyond the $25.25 intermediate hurdle, representing the July monthly swing high, towards the $26.00 round figure. This is closely followed by the YTD peak, around the $26.15 region touched in May, which if cleared should pave the way for an extension of the uptrend witnessed over the past two weeks or so.

Silver 1-hour chart

Technical levels to watch