Silver Price Analysis: XAG/USD sticks to gains near daily high, just above $25.00 mark

• Silver caught fresh bids on Wednesday and recovered a major part of the overnight losses.
• The mixed technical set-up warrants some caution before placing aggressive bullish bets.
• Sustained move beyond $26.00 will negate bearish bias and pave the way for further gains.

Silver regained positive traction on Wednesday and climbed back above the $25.00 psychological mark during the first half of the European session. The uptick allowed the white metal to reverse a major part of the overnight slide to a multi-day low.

From a technical perspective, the XAG/USD once again managed to find decent support and defend the 50% Fibonacci retracement level of the $22.00-$26.95 move up. The subsequent strength favours bullish traders and supports prospects for additional gains.

That said, neutral technical indicators on the daily chart warrants some caution. This makes it prudent to wait for some follow-through buying beyond the 38.2% Fibo. level before traders starts positioning for any further appreciating move for the XAG/USD.

The next relevant hurdle is pegged near the $25.40-$25.50 region, above which the momentum could get extended towards the $26.00 mark. The XAG/USD could then accelerate the move towards the $26.40 intermediate resistance en-route the $27.00 round-figure mark.

On the flip side, the $24.75 area now seems to protect the immediate downside ahead of the $24.55-$24.50 region (50% Fibo. level). A convincing break below would make the XAG/USD vulnerable to slide further towards testing sub-$24.00 levels, or the 61.8% Fibo. level.

The latter coincides with the 200-day SMA and should act as a pivotal point, which if broken will be seen as a fresh trigger for bearish traders. This would set the stage for an extension of the recent pullback from the $27.00 neighbourhood or the highest level since June 2021.

Silver 4-hour chart

Technical levels to watch