Silver Prices: XAG/USD seems vulnerable while below 38.2% Fibo. hurdle near $28.50

LONDON (August 16) Silver (XAG/USD) meets with some supply on Friday and erodes a part of the previous day's strong move up to the $28.50 area, or a nearly two-week high. The white metal remains depressed through the early European session and currently trades around the $28.15-$28.10 region, down over 0.70% for the day.

From a technical perspective, the recent recovery from the $26.45 area, or a three-month low touched last week stalls near the 38.2% Fibonacci retracement level of the July-August decline. The said barrier is pegged near mid-$28.00s and should act as a key pivotal point, above which a fresh bout of a short-covering rally should allow the XAG/USD to reclaim the $29.00 mark. 

The latter coincides with the 50% Fibo. level, which if cleared decisively should pave the way for additional gains. That said, oscillators on the daily chart – though have recovered from lower levels – are yet to confirm a positive bias and warrant some caution before positioning for any further near-term appreciating move. 

On the flip side, a sustained beak and acceptance below the $28.00 mark could drag the XAG/USD back toward the 23.6% Fibo. level, around the $27.75 region en route to the $27.45-$27.40 horizontal support. Some follow-through selling might shift the near-term bias back in favour of bearish traders and pave the way for further near-term losses towards the $27.00 round figure. 

The downward trajectory could extend further towards challenging the multi-month low, around the $26.45 area. This is closely followed by the very important 200-day Simple Moving Average (SMA), around the $26.35-$26.30 region, which if broken decisively will make a fresh breakdown. The XAG/USD might then prolong its one-month-old well-established downtrend.

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