Silver Price Analysis: XAG/USD slides to fresh YTD low, further below $22.00 mark

London (May 9)  Silver witnessed selling for the third successive day on Monday and dropped to a fresh YTD low, further below the $22.00 mark during the first half of the European session.

Given that last week's post-FOMC recovery move faltered near a resistance marked by an ascending trend-line support breakpoint, sustained break below the $22.00 mark has set the stage for further losses. That said, RSI (14) on the daily chart is already flashing oversold conditions and warrants some caution.

Nevertheless, the XAG/USD seems vulnerable to prolonging a four-week-old bearish trajectory and slide to retest the December 2021 low, around the $21.40 region. Some follow-through selling has the potential to drag spot prices further towards the next relevant support near the $21.00 round-figure mark.

On the flip side, any attempted recovery might now confront stiff resistance near the $22.40-$22.50 horizontal zone. Sustained strength beyond might trigger a short-covering move and allow the XAG/USD to reclaim the $23.00 mark and test last week's swing high, around the $23.25-$23.30 region.

The latter should act as a pivotal point for traders, which if cleared decisively would suggest that the XAG/USD has formed a near-term bottom and pave the way for further gains. Bulls might then aim to challenge the very important 200-day SMA, currently around the $23.70-$23.75 area, and reclaim the $24.00 mark.

reuters