Silver recovered on Monday, registering a gain of more than 1% courtesy of broad US Dollar weakness even though US Treasury bond yields climbed. Economic data from the United States was mixed, while US equities fluctuated between gainers and losers. The XAG/USD trades at $29.44 after hitting a daily low of $28.95.
From a daily chart standpoint, the grey metal is upward biased and still trading within the boundaries of a descending channel. Traders remain cautious, as shown by the Relative Strength Index (RSI), which is wavering around the 50-neutral line and indicates that neither buyers nor sellers are gathering momentum.
However, price action shows a formation of a ‘double bottom,’ though XAG/USD might clear key resistance levels, to confirm its validity.
Silver buyers need to clear the downslope trendline drawn from May highs, which is around $30.00. Once done, the ‘double bottom neckline’ will emerge at $30.84, the June 21 high. If cleared, this would confirm the bullish chart pattern. On further strength, XAG/USD could test the May 29 high of $32.29, ahead of the year-to-date (YTD) high of $32.51.
On the flip side, if XAG/USD falls below $29.00, the next support would be the June 26 low of $28.57. Once cleared, the next stop would be the April 15 swing low of $ 27.59.
