Silver (XAG/USD) began the week on a down note, falling below the $32.00 level and ending its recent three-day winning streak. In spite of the reversal, the technical configuration indicates limited downside, with solid support anticipated near the $31.30 area, where dip-buyers may re-enter. The metal’s recent rally faced resistance near the 61.8% Fibonacci retracement level, and a decisive move above the 200-period SMA on the 4-hour chart — around $32.55-$32.60 — is needed to confirm a bullish continuation toward the $33.00 and $34.00 targets. Until then, silver remains vulnerable to short-term corrections, though significant downside appears capped for now.

KEY LOOKOUTS

• This region, on the line of the 50% Fibonacci retracement level, is likely to be attracted to dip-buyers and could provide a sturdy floor against greater declines.

• A conclusive breach higher here in the 4-hour time frame will confirm a revival of bearish strength, and the path towards $33.00 and further will lie open.

• Further rejection closer to the 61.8% Fibo. level confirms risk-averse trading; though a breach would kindle the next move up to $33.20 and $33.50.

• A clean break below $31.00 might stimulate further technical selling, the next potential supports resting at $30.55 and the psychological $30.00 handle.

Silver (XAG/USD) starts the week on a downside note, with all eyes being on important technical levels that could dictate its direction next. The $31.30-$31.35 band continues to act as a major support level where buyers would want to step in and cap more losses. On the plus side, the $32.55-$32.60 area, defined by the 200-period Simple Moving Average on the 4-hour chart, is a solid resistance. A firm breakout above it would confirm the uptrend momentum and set up for a rally to $33.00 and, possibly, the March swing high around $34.00. In the meantime, the metal will trade between these two levels, with both buyers and sellers watching out for these key levels to act as the next directional catalyst.

Silver (XAG/USD) fell below the $32.00 handle, halting its recent ascent as selling interest resurfaced early this week. Important support is found around $31.30, where dip-buying sentiment may stem further losses. Breaking above $32.60 might unleash new bullish momentum towards $33.00 and higher.

•  Silver dips below $32.00 early in the week, breaking a three-session winning streak and falling from near-term highs.

•  Bounce is due near the $31.30-$31.35 region, where the 50% Fibonacci retracement mark may draw in dip-buyers.

•  Break above the 200-period SMA ($32.55-$32.60) on the 4-hour chart is necessary to validate bull strength and to set the stage for further rallies.

•   Resistance is still at the $33.00 psychological level and the $33.20 area (78.6% Fibonacci level), with a crucial barrier at $33.50-$33.55.

•   A failure to sustain $31.30 can lead to fresh downside, with the next support targets at $31.00, $30.55, and the $30.00 psychological level.

•   Technical indicators are mixed on the daily chart, with caution advised pending clear price confirmation.

•   Bulls and bears are stuck between $31.30 and $32.60, with chances of breakout situations determining the short-term trend.

Silver started the new week on a weaker note, retreating fractionally after a good performance last week. Despite the latest retreat, overall sentiment in the market for silver remains upbeat, with speculators keeping a close eye on the global economic trend, inflation figures, and demand for safe-haven assets. Silver continues to be a critically important metal not only in jewelry and investment, but increasingly in expanding industrial uses, such as solar panels and electric cars, which supports its long-term attractiveness.

XAG/USD DAILY PRICE CHART

CHART SOURCE: TradingView

This week’s sluggish starts may have less to do with a change in market sentiment than a healthy bout of profit-taking. Most investors still regard silver as a safe asset, particularly in uncertain economic times. While global markets weigh between growth fears and policy shifts, silver’s dual-base of industrial demand and safe-haven value keeps it as an important commodity to monitor in the weeks to come.

TECHNICAL ANALYSIS

Silver (XAG/USD) is presently going through a significant price area, where buyers and sellers are probing each other’s resilience. The metal recently encountered resistance around the $32.60 area, where the 200-period Simple Moving Average (SMA) on the 4-hour chart, indicating that breaking above this area could spark new bullish momentum. On the negative side, the $31.30-$31.35 region is still a major support area, closely corresponding to the 50% Fibonacci retracement level, where dip-buying interest will be seen. Until silver breaks out of this zone, the price will likely consolidate, with traders waiting for a definitive move above or below these levels to validate the direction of the next trend.

FORECAST

If silver (XAG/USD) can regain its footing and overcome the $32.55–$32.60 resistance level, it might induce new buying pressure in the market. Breaking above this level would most likely make way for the path towards the $33.00 psychological level with the possibility of further extending gains towards the $33.20 area, which is also at the 78.6% Fibonacci retracement level. If the momentum holds, the rally may continue into the $33.50–$33.55 resistance band and even attempt to reach the $34.00 level, which was the March swing peak.

Conversely, if silver does not manage to hold support around $31.30–$31.35, it can attract new selling pressure. Breaking below this region may trigger a more extensive correction towards the $31.00 round number. If bearish momentum gains strength, the price may fall further to challenge the $30.55 support, which is close to the 38.2% Fibonacci retracement level. Sustained weakness may even drag silver down to the $30.00 psychological level and, in a more extreme bearish case, the $29.55 area.