Silver (XAG/USD) remains pressured, paring the last Thursdays corrective pullback from a multiday low during Friday’s Asian session.

In doing so, the bright metal seesaws around 78.6% Fibonacci retracement level of an upside from late September to mid-November. Adding to the bearish bias is the descending trend line from November 22.

However, oversold RSI conditions challenge the XAG/USD sellers, which in turn question the bears and raises hopes of a bounce towards the short-term resistance line, near $22.65 at the latest. The main driver of recent weakness in silver markets has been a strengthening US dollar (the DXY has risen from around 94.00 to current levels around 96.00) and rising US real yields 5-year TIPS are roughly 40bps higher versus mid-November levels under -1.90%. Both reflect a hawkish shift in Fed expectations.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Silver (XAG/USD) grinds higher around $22.50, down 0.14% intraday, amid early Monday.

In doing so, the bright metal fades Friday’s bounce off 78.6% Fibonacci retracement (Fibo.) level of September-November upside while easing from a resistance line of the two-week-old descending trend channel.

Given the bullish MACD and the quote’s repeated bounces off the key stated key Fibo. level surrounding $22.25-20, silver prices are likely to recover.

However, a clear upside break of the immediate hurdle surrounding $22.65 becomes necessary for the bulls to retake controls.

Even so, early November’s low near the $23.00 threshold and 200-SMA level of $24.00 will be tough nuts to crack for the XAG/USD bulls.

On the contrary, pullback moves will retest the stated Fibonacci retracement level of $22.25-20, a break of which will direct silver prices to the $22.000 and then to the channel’s support line near $21.80.

Silver Challenging Lows of Bearish Channel

Dec 06 2021

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