Silver (White Metal) witnessed a short-covering bounce on the last day of the week and recovered a part of the overnight slump to its lowest level since July 2020. The recovery momentum extended through the early European session and pushed spot prices back closer to the $21.00 round-figure mark.
Given that RSI (14) on the daily chart is flashing extremely oversold conditions, traders opted to lighten their bearish bets around the silver amid modest US dollar pullback from a two-decade high. Ay meaningful upside, however, still seems elusive amid the risk-on impulse in the markets.
Read More: Spot Gold Forecast: Gold Support $1,808, Keep Eye on US Data
The overnight sustained below the double-bottom support near the $21.40 region was seen as a fresh trigger for bearish trades. This comes on the back of the recent breakdown through an ascending trend-line and suggests the attempted recovery runs the risk of fizzling out rather quickly.
Hence, any subsequent move up is more likely to confront stiff resistance and remain capped near the aforementioned support breakpoint, around the $21.50 area. That said, sustained strength beyond has the potential to lift the silver and allow bulls to reclaim the $22.00 round figure.
On the flip side, the Year to date (YTD) low, around the $20.55 region, now seems to protect the immediate downside. Some follow-through selling would reaffirm the near-term negative bias and make the silver vulnerable to slide further towards challenging the $20.00 psychological mark.
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