Silver Price Analysis: XAG/USD eases from multi-month peak, bullish potential intact

• Silver hits a fresh multi-month peak on Thursday, albeit lacks follow-through buying.
• The technical set-up favours bullish traders and supports prospects for further gains.
• Dips to the $21.70-60 resistance breakpoint could be seen as a buying opportunity.

Silver climbs to a nearly six-month high on Thursday, though the intraday positive move stalls ahead of the mid-$22.00s. The white metal retreats to the lower end of its daily trading range during the early European session and is currently placed around the $22.25-$22.20 region.

From a technical perspective, the overnight sustained breakout through the $21.60-$21.70 supply zone and a subsequent move beyond the $22.00 mark was seen as a fresh trigger for bulls. Moreover, oscillators on the daily chart are holding comfortably in the positive territory and are still far from being in the overbought zone. This, in turn, supports prospects for a further near-term appreciating move for the XAG/USD.

Hence, any follow-through pullback below the $22.00 mark might still be seen as a buying opportunity and is more likely to remain limited near the $21.70-$21.60 resistance breakpoint. This is followed by the very important 200-day SMA, around the $21.35-$21.30 region, which should act as a pivotal point. A convincing break below the latter could drag the XAG/USD below the $21.00 mark, to the $20.85-$20.80 support zone.

On the flip side, the multi-month peak, around the $22.40 region, could offer some resistance to the XAG/USD. Some follow-through buying, however, will reaffirm the positive outlook and set the stage for an extension of the upward trajectory. The XAG/USD might then accelerate the momentum and aim to reclaim the $23.00 round figure, with some intermediate resistance near the $22.70 area.

Silver 4-hour chart

Key levels to watch