• Silver adds to the overnight modest uptick and edges higher for the second straight day.
• The technical set-up favour bulls and supports prospects for a further appreciating move.
• A convincing break below the $19.20 area would shift the bias in favour of bearish traders.

Silver gains some positive traction for the second successive day on Thursday and moves further away from a multi-day low, around the $19.75 region touched the previous day. The intraday uptick picks up pace during the first half of the European session and lifts the white metal to a fresh daily high, around the $20.20 region.

From a technical perspective, any subsequent move up is likely to confront stiff resistance near the $20.30-$20.40 confluence. The said barrier comprises the 50% Fibonacci retracement level of the $22.52-$18.15 downfall and the 50-day SMA. This should now act as a key pivotal point and help determine the near-term trajectory for the XAG/USD.

Oscillators on the daily chart, meanwhile, are holding comfortably in the positive territory and have been gaining traction on hourly charts. The technical setup supports prospects for an eventual breakout through the aforementioned confluence resistance. The XAG/USD might then climb to the 61.8% Fibo. level, around the $20.85 area, en route to the $21.00 mark.

The momentum could further get extended and lift spot prices towards the next relevant hurdle near the $21.40-$21.50 area en route to the $22.00 round-figure mark. The latter coincides with the 100-day SMA, which if cleared decisively would be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move.

On the flip side, the $19.80-$19.75 region, or the 38.2% Fibo. level now seems to act as immediate support. Any subsequent decline is more likely to stall near the 23.6% Fibo. level, around the $19.20 region. Some follow-through selling would suggest that the recovery from the YTD low has run out of steam and shift the bias in favour of bearish traders.

The XAG/USD would then turn vulnerable to weakening further below the $19.00 mark and test the $18.50 intermediate support. Spot prices could eventually drop towards challenging the YTD low, around the $18.15 region touched on July 14.

Silver daily chart

Key levels to watch