Silver Price Analysis: XAG/USD languishes near multi-week low, seems vulnerable around mid-$22.00s

• Silver drifts lower for the third straight day and drops to over a three-week low on Wednesday.
• The technical setup favours bearish traders and supports prospects for further near-term losses.
• Any attempted recovery move might now confront resistance and remain capped near $22.80.

Silver (XAG/USD) continues losing ground for the third straight day on Wednesday and drops to over a three-week low during the early part of the European session. The white metal, however, manages to recover a bid in the last hour and currently trades around the mid-$22.00s, still down nearly 0.50% for the day.

From a technical perspective, this week's failure near the very important 200-day Simple Moving Average (SMA), followed by the overnight close below the $22.80-$22.75 horizontal support, favours bearish traders. Moreover, oscillators on the daily chart have just started drifting in the negative territory. This, in turn, suggests that the path of least resistance for the XAG/USD is to the downside and supports prospects for an extension of the recent rejection slide from the $23.60-$23.70 supply zone, which constituted the formation of multiple tops on the daily chart.

Hence, a subsequent downfall towards the $22.00 round-figure mark, en route to the next relevant support near the $21.70 zone, looks like a distinct possibility. The XAG/USD could extend the downward trajectory further towards the $21.35-$21.30 support before eventually breaking below the $21.00 mark, towards challenging a multi-month low, around the $20.70-$20.65 area touched in October.

On the flip side, any attempted recovery might now confront stiff resistance near the $22.80 support breakpoint ahead of the $23.00 round figure. This is followed by the 200-day SMA, currently pegged near the $23.25 region, and the $23.60-$23.70 supply zone. A sustained strength beyond the latter might shift the near-term bias in favour of bullish traders and lift the XAG/USD to the $24.00 mark. The momentum could get extended further beyond the $24.20-$24.25 intermediate hurdle should allow bulls to make a fresh attempt to conquer the $25.00 psychological mark.

Silver daily chart

Technical levels to watch