Silver Price Analysis: XAG/USD bulls retain control, await a move beyond $25.00

• Silver touches a fresh two-month peak on Tuesday, albeit lacks any follow-through.
• The technical setup favours bullish traders and supports prospects for further gains.
• Any meaningful corrective slide is more likely to get bought into and remain limited.

Silver catches fresh bids on Tuesday and climbs to over a two-month peak, albeit continues with its struggle to find acceptance or build on the momentum beyond the $25.00 psychological mark. The technical setup, meanwhile, suggests that the path of least resistance for the white metal is to the upside.

Last week's sustained breakout through the $24.50-$24.60 static barrier, which coincided with the 61.8% Fibonacci retracement level of the May-June downfall was seen as a fresh trigger for bullish traders. This, along with the fact that oscillators on the daily chart are holding in the positive territory, validates the outlook and supports prospects for a further near-term appreciating move for the XAG/USD.

The subsequent move up could get extended further towards the $25.50-$25.55 region, above which the XAG/USD might aim to reclaim the $26.00 round figure and then challenge the YTD peak, around the $26.10-$26.15 area touched in May. Some follow-through buying will set the stage for an extension of the recent goodish rebound from the vicinity of the $22.00 mark, or a three-month low touched in June.

On the flip side, the $24.50 resistance breakpoint (61.8% Fibo. level) now seems to protect the immediate downside, below which the XAG/USD could slide towards testing the $24.00 mark. This is followed by supports near the $23.65-$23.60 area and the $23.20-$23.15 zone. A convincing break below the $23.00 round figure will negate the positive outlook and shift the bias in favour of bearish traders.

Silver daily chart

Key levels to watch