Silver trades with a positive bias for the third successive day on Thursday.
The technical setup warrants caution before positioning for further gains.
A convincing breakout through $23.00 is needed for bulls to seize control.
Silver (XAG/USD) attracts some buyers for the third successive day on Thursday and sticks to its modest intraday gains, near the $22.70-$22.75 region through the first half of the European session. The white metal, however, remains below the weekly top, around the $23.00 round figure touched the previous day.
The aforementioned handle represents a downward-sloping trend-line resistance extending from the December swing high and should act as a key pivotal point. A sustained strength beyond might trigger a short-covering rally and lift the XAG/USD to the $23.25-$23.30 intermediate resistance en route to the very important 200-day Simple Moving Average (SMA), currently around mid-$23.00s.
Some follow-through buying will suggest that the XAG/USD has bottomed out in the near term and pave the way for a move towards reclaiming the $24.00 round figure. The momentum could extend further towards the next relevant resistance near the $24.40-$24.50 area. That said, oscillators on the daily chart are yet to confirm a bullish bias and warrant some caution before positioning for further gains.
On the flip side, the $22.60-$22.55 zone now seems to protect the immediate downside, below which the XAG/USD could slide back to retesting over a two-month low, around the $21.95-$21.90 region touched on Monday. A convincing break below the latter will be seen as a fresh trigger for bearish traders and expose the $21.40-$21.35 support. The subsequent fall could drag the metal to the $21.00 round figure en route to the October monthly swing low, around the $20.70-$20.65 region.
Silver daily chart
Technical levels to watch