Silver (XAG/USD) edges slightly higher during the Asian session on Tuesday, trading around the $29.65 region, up 0.15% intraday. However, the metal struggles to maintain upward momentum after Monday’s pullback near the 100-day Exponential Moving Average (EMA), signaling potential weakness in its recovery rally from the $28.80-$28.75 region.
Technical Analysis
Key Resistance Levels:
$30.00 Psychological Mark: Immediate resistance level; a significant hurdle for bullish momentum.
$30.50-$30.55 (100-day EMA): A sustained breakout above this level would tilt the bias toward bullish traders.
$31.00 Round Figure: Intermediate resistance that could invite further buying interest.
$31.35-$31.40 Zone: Next notable barrier if the uptrend extends.
Key Support Levels:
$29.50 Mid-Level: A breach here reinforces the bearish outlook.
$29.00 Level: Critical psychological and technical support zone.
$28.80-$28.75 Region: Tested in December, marking a three-month low.
$28.45-$28.40 Area: A decisive drop below this could expose Silver to further declines.
$28.00 and $27.70-$27.65 Levels: Downside targets for an extended bearish move.
Oscillators and Sentiment
Mixed Oscillators on the Daily Chart: Indicate uncertainty, requiring caution before aggressive bearish bets.
Failure Near 100-day EMA: Validates a negative short-term outlook, despite intermittent bullish attempts.
Fundamental Overview
Silver’s lack of conviction is compounded by broader market sentiment:
Stronger US Dollar (USD): Bolstered by robust US economic data, which raises expectations of a slower pace of Federal Reserve rate cuts in 2025.
US Treasury Yields: Persistent strength limits Silver’s appeal as a non-yielding asset.
Inflation Data Awaited: US Producer Price Index (PPI) later today could provide fresh impetus for market direction.
Conclusion
Silver remains vulnerable to further downside as the technical outlook tilts bearish, with key support at $29.00 and the potential for retests of December’s lows near $28.80-$28.70. A sustained break above $30.50-$30.55 is needed to shift the near-term bias toward bullish traders. Until then, caution is warranted amid mixed technical signals and macroeconomic uncertainties.
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