Silver Price Consolidates Near Monthly Low, Potential for Further Decline Looms

  • Silver price is in a bearish consolidation phase and trading near a monthly low.
  • Technical indicators suggest a negative outlook, with repeated failures to break above the 200-period Simple Moving Average and oscillators drifting into negative territory.
  • If silver breaks below the $23.00 mark, it could test the May monthly swing low and the important 200-day SMA, potentially leading to a further downward trajectory. On the other hand, a break above key resistance levels could trigger a short-covering move and lift the price towards higher levels.

Silver price remains in a bearish consolidation phase as it struggles near a monthly low of 446.44 South African Rand (ZAR). The failure to break above the 200-period Simple Moving Average (SMA) and negative oscillators on the daily chart indicate a bearish bias. However, caution is advised as the Relative Strength Index (RSI) on hourly charts shows oversold conditions. Despite this, XAG/ZAR is vulnerable to extending its losses in the coming days.

If the 446.44 ZAR support level is decisively broken, it would confirm the negative outlook and push silver towards testing the May monthly swing low in the 434.90-431.62 ZAR region. The next important level to watch is the 200-day SMA around 408.87-405.95 ZAR. A failure to defend this support could lead to a fresh bearish breakdown, with the 400.00 ZAR mark becoming the next target. Further downside could extend towards the 392.70-390.81 ZAR horizontal zone, ultimately reaching the 384.28 ZAR round-figure mark.

On the upside, immediate resistance is seen around the 455.45-458.14 ZAR region, followed by the 200-period SMA on the 4-hour chart at approximately 437.04 ZAR. If there is sustained buying momentum above the 439.68 ZAR mark, it could trigger a short-covering rally and push XAG/ZAR towards the 448.71-450.34 ZAR zone, which represents the monthly peak. Breaking above this level would be significant, as it would allow bulls to target the psychological level of 457.25 ZAR and test the resistance zone at 461.74-463.75 ZAR.

*All currencies in the article have been converted to the South African Rand

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