XAG/USD appears vulnerable and an uptrend break is in progress.

• Silver consolidated Wednesday’s losses to a nearly three-week low.
• The technical setup favors bearish traders and supports the prospect of further losses.
• Any recovery attempt can be considered a sales opportunity and is still limited.

Silver (XAG/USD) is struggling to gain meaningful traction on Thursday, oscillating in a narrow trading band around the $23.00 round mark for the first half of the European session. Meanwhile, platinum remains close to the three-week low reached on Wednesday, and the downward trend seen over the past week or so appears likely to be prolonged.

From a technical perspective, the overnight decline and close below an extended upward trend line from the October 2023 lows was seen as a fresh trigger for bearish traders. Moreover, the oscillator on the daily chart is gaining negative traction, proving the near-term negative outlook. This suggests that the path of least resistance for XAG/USD is downwards.

So a follow-up slide to test the December monthly lows in the mid-$22.00 range certainly looks likely. The downward trajectory may extend further towards the next relevant support near the $22.25 area en route to the $22.00 circular mark.

On the other hand, the uptrend support breakpoint around $23.30-$23.35 now appears to act as a strong immediate barrier. The subsequent rise will likely attract new sellers near the $23.55 area and remain near the $23.80 horizontal barrier. A continued rise could trigger a short-term rally and push XAG/USD above the $24.00 level.

Some follow-up buying suggests that the recent corrective decline is in full swing, with XAG/USD rising to $24.60 (December 22 high). Bulls could eventually aim to reclaim the psychological mark of $25.00.

silver daily chart

Skill levels to watch out for