Silver Price Analysis: XAG/USD Bulls Retain Control Above $23.50, Highest Since February

Silver catches fresh bids on Thursday, following the previous day’s two-way/directionless price moves, and rallies to a nearly two-month high during the early European session. The white metal is currently placed around the $23.60-$23.65 region, up over 1% for the day. It seems poised to prolong its recent appreciating move from levels just below the $20.00 psychological mark or the YTD low touched earlier this March.

Against the backdrop of the recent breakout through the 61.8% Fibonacci retracement level of the pullback from over a nine-month peak, the ongoing positive move adds credence to the bullish outlook for the XAG/USD. Hence, back towards the $24.00 mark, some follow-through strength looks like a distinct possibility. The momentum could extend further towards the $24.65 region (multi-month peak touched in February) en route to the $25.00 psychological mark.

That said, Relative Strength Index (RSI) on the 1-hour chart is already flashing overbought conditions and remains close to 70 on 4-hour/daily charts. This makes it prudent to wait for some near-term consolidation or a modest pullback before placing new bullish bets. Any meaningful corrective slide, however, might now be seen as a buying opportunity near the $23.00 round-figure mark and remain limited near the 61.8% Fibo—level resistance breakpoint, around the $22.80 area.

The latter should now act as a strong base and a pivotal point, which, if broken decisively, might prompt some technical selling. A subsequent slide below the $22.50 region could drag the XAG/USD towards the $22.20 intermediate support en route to the $22.00 round figure. This is closely followed by the $21.75-$21.70 zone. A convincing break below said support levels is needed to negate the positive outlook and shift the near-term bias in favor of bearish traders.