Silver holds at $32.35; key support at $31.92. Resistance at $33 could trigger further gains. Watch technical indicators closely.
Silver Price Analysis: XAG/USD Holds Gains Amid Negative Divergence Concerns
Silver prices remained stable on Monday as XAG/USD traded at $32.35, following a peak of $33.39, marking a three-month high.
The metal saw a 0.70% increase for the day. Technical indicators advise traders to exercise caution as there is a divergence in momentum, indicating potential downward pressure.
While silver prices have been on the rise lately, however, the Relative Strength Index (RSI) does not seem to support the peaks as much as expected. This situation brings up doubts regarding the sustainability of the current upward momentum in silver trading. The initial support level is marked at $31.92. If this level is breached downwards, then there is a possibility that prices may undergo testing near the 100-day Simple Moving Average set at $31.15. In case of selling pressure intensifies any further, there is a chance that silver values could drop even lower, to $30.60 initially followed by $30.42 later on.
The positive aspect is that there is a resistance level of $32. 50 and $33 serve as a barrier to overcome. If this barrier is surpassed successfully, it would pave the way for a reevaluation of the point for the year at $33. 39.
The price of silver is influenced by factors such as the strength of the US dollar and demand from industries; it also reflects changes in investor confidence regarding inflation and economic trends which traders must closely monitor to predict the direction of XAG/USD.
