XAG/USD sits near 10-week peak, bulls await a move beyond $24.00

• Silver attracts some buyers for the fifth successive day on Friday.
• The overnight breakout through the $23.60-70 area favours bulls.
• Corrective declines are likely to get bought into and remain limited.

Silver (XAG/USD) gains positive traction for the fifth successive day on Friday and remains well within the striking distance of its highest level since September 4 touched the previous day. The white metal currently trades just below the $24.00 mark and seems poised to build on this week’s solid bounce from a four-week trough.

From a technical perspective, acceptance above the very important 200-day Simple Moving Average (SMA) and the overnight breakout through the $23.60-$23.70 supply zone was seen as a fresh trigger for bullish traders. Moreover, oscillators on the daily chart have been gaining positive traction and validate the near-term positive outlook, suggesting that the path of least resistance for the XAG/USD is to the upside.

Some follow-through buying beyond the $24.00 round figure will reaffirm the constructive setup and the white metal to the $24.20-$24.25 intermediate resistance. The momentum could get extended and allow the XAG/USD to make a fresh attempt towards conquering the $25.00 psychological mark. Nevertheless, Silver remains on track to register strong weekly gains and post its highest weekly close since late August.

On the flip side, the $23.70-$23.60 strong resistance breakpoint now seems to protect the immediate downside ahead of the 200-day SMA, currently pegged near the $23.30 region. Any further decline might now attract fresh buyers and remain limited near the $23.00 mark. The latter should act as a key pivotal point, which if broken could drag the XAG/USD to the $22.35-$22.30 zone en route to the $22.00 mark.

A convincing break below the latter might shift the near-term bias back in favour of bearish traders. Some follow-through selling below the $21.85 region, or the monthly low, could make the XAG/USD vulnerable to accelerate the fall towards the $21.35-$21.30 region. The white metal could eventually weaken further below the $21.00 mark and test a multi-month low, around the $20.70-$20.65 area touched in October.

Silver daily chart

Technical levels to watch