- Silver once again finds some support and attracts buyers near the $32.20 area.
- The formation of a bullish flag pattern supports prospects for additional gains.
- Any meaningful slide could be seen as a buying opportunity and remain limited.
Silver (XAG/USD) attracts some dip-buyers near the $32.20 area during the Asian session on Friday and climbs to a fresh daily high in the last hour. The white metal, however, remains well within the previous day’s broader trading range and currently trades just above mid-$32.00s, up over 0.25% for the day.
From a technical perspective, the recent price action along a downward sloping channel constitutes the formation of a bullish flag pattern against the backdrop of a goodish recovery from the $28.45 area, or the year-to-date low touched in April. Moreover, oscillators on daily/hourly charts are holding in positive territory, suggesting that the path of least resistance for the XAG/USD is to the upside.
Any subsequent move up, however, is likely to confront some resistance ahead of the $33.00 round figure or the overnight swing high. This is closely followed by the top boundary of the descending channel, currently around the $33.15 zone, below which the XAG/USD could accelerate the move higher towards the $33.70 intermediate hurdle before bulls aim to reclaim the $34.00 mark.
On the flip side, the $32.25-$32.20 region now seems to have emerged as an immediate strong support. Any further weakness, leading to a subsequent break below the $32.00 mark, could expose the descending channel support near the $31.50-$31.45 zone. The latter should act as a pivotal point, which, if broken, will negate the constructive setup and shift the near-term bias in favor of bearish traders.
Silver 4-hour chart
