Silver Price Analysis: XAG/USD climbs back closer to $23.00, over one-week high set on Thursday

• Silver attracts some buying for the second straight day and seems poised to appreciate further.
• A sustained move back above the $22.70 confluence resistance validates the positive outlook.
• Weakness below the daily low might negate the bullish bias and prompt some technical selling.

Silver gains some positive traction for the second successive day on Friday and climbs back closer to over a one-week top touched the previous day. The white metal currently trades around the $22.85 region, up just over 0.80% for the day, and seems poised to build on its steady intraday ascent amid a modest US Dollar (USD) weakness.

From a technical perspective, the emergence of fresh buying and a sustained move back above the $22.70 confluence resistance add credence to the positive outlook. The said barrier comprises the 200-hour Simple Moving Average (SMA) and the top end of a descending trend channel extending from the August 8 high, which, in turn, should now act as immediate strong support. Some follow-through selling below the daily swing low, around the $22.65 region, however, will negate the positive bias and prompt aggressive selling around the XAG/USD.

With oscillators on the daily chart still holding in the negative territory, Silver might then accelerate the fall back towards testing the multi-month low, around the $22.10 region touched in June. This is closely followed by the $22.00 mark, below which the slide could get extended to the $21.55-$21.50 area en route to the $21.00 round figure. The XAG/USD could then slide to the $20.60 support before dropping to the $20.00 psychological mark.

Meanwhile, technical indicators on hourly charts have been gaining positive traction and support prospects for a further intraday appreciating move. A sustained strength beyond the $23.00 mark will reaffirm the outlook and allow the white metal to challenge the 200-day SMA, currently pegged around the $23.25 region. Some follow-through buying might trigger a fresh bout of a short-covering move and lift the XAG/USD to the $23.60-$23.65 horizontal barrier. The momentum could get extended further and allow bulls to aim to reclaim the $24.00 round figure.

Silver 1-hour chart

Technical levels to watch