- Silver regains positive traction on Monday and climbs back closer to the YTD peak.
- The technical setup favours bullish traders and supports prospects for further gains.
- Overbought RSI on the daily chart warrants caution before placing aggressive bets.
Silver attracts some dip-buying on the first day of a new week and steadily climbs back closer to the $25.00 psychological mark during the first half of the European session. The white metal is currently placed just below a nearly one-year high touched on Friday and seems poised to prolong its recent upward trajectory witnessed over the past month or so.
Last week’s sustained breakout through the $24.30-$24.40 strong horizontal barrier was seen as a fresh trigger for bullish traders. Furthermore, the emergence of fresh buying ahead of the said resistance breakpoint now turned support, adds credence to the positive outlook. That said, Relative Strength Index (RSI) on the daily chart is flashing overbought conditions and warrants some caution before positioning for any further appreciating move.
Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for a fresh leg up. Nevertheless, the XAG/USD seems poised to surpass the $25.10-$25.15 area and climb further towards the $25.35-$25.40 region. The momentum could get extended towards the $26.00 mark en route to the next relevant hurdle near the $26.20 area, the $26.40-$26.50 zone and the 2022 high, just ahead of the $27.00 mark.
On the flip side, any meaningful pullback is likely to attract fresh buyers and remain limited near the $24.40-$24.30 resistance-turned-support. The said area should now act as a pivotal point, which if broken decisively might prompt some technical selling. The XAG/USD might then turn vulnerable to weaken below the $24.00 mark and test the $23.60-$23.55 support area before eventually dropping to the $23.15 zone en route to the $23.00 round figure.