Silver Price Analysis: XAG/USD holds steady near $23.00, bulls retain control above 61.8% Fibo.

• Silver is seen oscillating in a narrow trading band around the $23.00 mark on Tuesday.
• The setup favours bullish traders and supports prospects for additional near-term gains.
• A convincing break below the $22.00 mark is needed to negate the constructive outlook.

Silver struggles for a firm intraday direction on Tuesday and seesaws between tepid gains/minor losses through the first half of the European session. The white metal is currently placed around the $23.00 round-figure mark, nearly unchanged for the day, and seems poised to prolong its recent upward trajectory witnessed over the past three weeks or so.

The intraday downtick finds some support near the 61.8% Fibonacci retracement level of the recent pullback from a multi-month peak. Furthermore, 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, favours bullish traders and suggests that the path of least resistance for the XAG/USD is to the upside.

That said, it will still be prudent to wait for some follow-through buying beyond the overnight swing high, near the $23.25 area, before positioning for any further gains. The XAG/USD might then surpass the $23.50 hurdle (the multi-week top set last Friday) and accelerate the momentum towards the $24.00 mark en route to the multi-month peak, around the $24.65 region touched in February.

On the flip side, weakness below the $22.80 zone is likely to find some support near the $22.50 area. Some follow-through selling has the potential to drag the XAG/USD towards the $22.20 region. This is followed by the $22.00 mark and the $21.75-$21.70 support (38.2% Fibo. level). Failure to defend the said support levels will negate the positive outlook and shift the near-term bias in favour of bears.

Silver daily chart

Key levels to watch