The Silver Price (XAG/ZAR) is navigating treacherous territory, marking its fifth consecutive day of decline to print its lowest level since March 17, around ZAR410.40, amid Friday’s Asian trading session.
This dramatic decrease validates the early-week breach of an ascending support line from mid-March, which now forms a resistance barrier around ZAR432.48. This follows the significant breakdown of the 200-day moving average (DMA) level hovering near ZAR420.20 during the previous trading day.
Bolstering the position of the silver sellers are bearish signals from the Moving Average Convergence Divergence (MACD) indicator.
However, the Relative Strength Index (RSI) (14) line’s oversold condition suggests limited room for further declines for XAG/ZAR. Consequently, the 50% Fibonacci retracement level of the metal’s upward trajectory from September 2022 to May 2023, near ZAR406.72, comes into focus.
Should the decline persist, an upward sloping support line from early September and the 61.8% Fibonacci retracement level, respectively around ZAR397.32 and ZAR387.92, will represent the final bulwarks for the silver buyers.
On the flip side, a resurgence in XAG/ZAR beyond the 200-DMA level of ZAR420.20 and the support-turned-resistance line near ZAR432.48 could embolden the buyers to challenge the monthly high hovering around ZAR458.02. A successful breach of this level could push the silver bears out of the picture, potentially signalling a shift in market sentiment.
South African traders are keeping a watchful eye on these key technical levels, as fluctuations in the international silver market can have ripple effects on local commodities and broader financial markets.
*All currencies in the article have been converted to the South African Rand