Silver Price Analysis: XAG/USD struggles near multi-week low, bearish bias remains

• Silver oscillates in a narrow band above its lowest level since June 30 set on Monday.
• The setup remains tilted in favour of bears and supports prospects for further losses.
• Attempted recovery towards the $23.00 mark could be seen as a selling opportunity.

Silver struggles to capitalize on the previous day's modest bounce from the $22.35 region, or its lowest level since June 30 and oscillates in a narrow band through the early part of the European session on Tuesday. The white metal currently trades just above the mid-$22.00s and remains vulnerable to prolong the recent downward trajectory witnessed over the past four weeks or so.

Last week's breakdown through a short-term ascending trend line support extending from the June swing low and a subsequent slide below the very important 200-day Simple Moving Average (SMA) was seen as a fresh trigger for bearish traders. Adding to this, technical indicators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, along with the lack of any meaningful buying, suggests that the path of least resistance for the XAG/USD is to the downside.

Hence, some follow-through weakness back towards retesting the multi-month low, around the $22.15-$22.10 area touched in June, looks like a distinct possibility. This is closely followed by the $22.00 mark, below which the white metal could accelerate the fall towards the $21.55-$21.50 intermediate support en route to the $21.00 mark. The XAG/USD could extend the slide further towards the $21.00 round figure en route to the YTD low, or levels just below the $20.00 psychological mark touched in March.

On the flip side, attempted recovery is likely to confront some resistance near the overnight swing low, around the $22.75 region, ahead of the $23.00 round figure.  Any subsequent move up might still be seen as a selling opportunity and remain capped near the $23.20-$23.30 confluence support breakpoint, now turned resistance. The latter should act as a pivotal point, which if cleared decisively might trigger a short-covering move and lift the XAG/USD to the $23.60-$23.65 horizontal barrier. Bulls might then aim to reclaim the $24.00 mark.

Silver daily chart

Technical levels to watch