Silver Price Analysis: XAG/USD languishes near YTD low, bears look to seize control below 50% Fibo.

• Silver is seen consolidating this week’s downfall back closer to the YTD low.
• The setup favours bearish traders and supports prospects for further losses.
• A sustained move beyond the $22.00 barrier could negate the bearish bias.

Silver enters a bearish consolidation phase on Friday and oscillates in a narrow trading band through the early European session. The white metal is currently placed around the $21.30-$21.25 area, just above the YTD low touched last week, and seems vulnerable to slide further.

The XAG/USD now seems to have found acceptance below the 50% Fibonacci retracement level of the recent rally from October 2022. This comes on the back of this week's repeated failures near the $22.00 mark, or the 100-day Simple Moving Average (SMA), and could be seen as a fresh trigger for bearish traders.

That said, Relative Strength Index (RSI) on the daily chart is flashing slightly oversold conditions and warrants some caution. This makes it prudent to wait for some near-term consolidation or a modest bounce before placing fresh bearish bets around the XAG/USD positioning for any further depreciating move.

Nevertheless, the XAG/USD seems poised to weaken further below the $21.00 mark (200-day SMA) and accelerate the fall towards the next relevant support near the $20.60 zone. The downward trajectory could get extended further towards the $20.00 psychological mark en route to the $19.75-$19.70 region.

On the flip side, the $21.55-$21.60 region now seems to act as an immediate hurdle. Any subsequent move-up might continue to attract fresh sellers near the $22.00 mark. The said handle is closely followed by the 38.2% Fibo. level, around the $22.15 zone, which should now act as a key pivotal point.

A sustained strength beyond could trigger a short-covering rally and lift the XAG/USD towards the $22.55-$22.60 supply zone. Bulls might eventually aim to reclaim the $23.00 round-figure mark, which coincides with the 23.6% Fibo. level.

Silver daily chart

Key levels to watch