Silver Price Analysis: XAG/USD Holds Key Support as Traders Watch $83

As can be seen on the latest XAG/USD charts, the price has been consolidating after a robust rally and is now forming a new daily chart setup, defined by support and resistance levels.

In particular, analysts aren’t focusing on simply moving up or down. The main chart suggests that silver will likely rally toward the $83 resistance level but then retract back to the support level in the coming days.

Silver Support Zone Comes Into Focus

The primary scenario is that silver will continue to head toward the $70.86–$72.20 support zone, the Economic Office said. If that level is tested and is maintained, the analyst believes that a move back to $83.05 may be in progress.

The analyst X chart placed support at $72.20, $70.86, and $66.93. Resistance sits at $83.05. This provides traders with a solid range to take a look at as silver continues its week-long journey.

A break above $70.86 will allow the bull market to remain in place. But a move below it would break down the formation and bring the focus back to the lower $66.93 support area.

Silver has also rallied off a recent high, as seen in the chart. Now, Price is attempting to hold above the area of marked support that could be the missing key for buyers to return with any vigor.

Weekly Base Shows Compression

Silver and gold are forming huge weekly bases with volume levels down, said TradeLogic. Both metals are becoming “extremely tight” as well, the analyst added, a sign that is typically followed by a bigger directional move.

Silver’s weekly chart indicates a wedge formation following its rally. The moving averages are coming in close, indicating that the price is not far from the moving averages, and the smaller range indicates that traders are waiting for confirmation before making stronger moves.

Plus, the chart implies that a breakout above the wedge would continue the high, bigger picture move from November. This is a price view that requires the price to break above the resistance with increased volume.

Silver has already proved strong in the long haul vis-à-vis previous years. The new configuration is still to be confirmed, though, as density will rebound, and tight structures can crack either way.

Short-Term Pattern Points Higher

XAG/USD was consolidating in a short time frame and moving into a short-term bull market formation, as seen on Kerem KATIPOĞLU’s chart. The chart was graphed in the flag style pattern, with price increases, pauses, and then tries to break out again.

With that configuration, the short-term recovery X chart looks good, but the significant resistance level near $83.05 is the major resistance for an upside move. If buyers buy into that area, it will further validate that they’re still supporting the wider bull market.

Meanwhile, the $72.20 and $70.86 levels are being closely followed by traders. Those numbers are lower than the prevailing price and could bring attention to the market if silver cools prior to making a new high.

The price action within this range will determine Silver’s next direction. If the pullback is controlled and the price level holds, then the setup for a rebound will remain intact; however, if it drops below $70.86, then the price move towards $83.05 will be postponed.