Silver Price Analysis: XAG/USD bounces off monthly lows, remains vulnerable

• Silver prolonged its recent downward trajectory and refreshed monthly lows on Monday.
• Slightly oversold RSI on the 1-hour chart helped limit any further losses, for the time being.

Silver extended its recent retracement slide from the $24.80-85 region and witnessed some follow-through selling on the first day of a new trading week. This marked the fifth day of a negative move in the previous six and dragged the white metal to fresh monthly lows, around the $23.40-35 region during the early North American session.

Expectations for an imminent Fed taper announcement later this year pushed the US dollar to two-week tops and weighed on dollar-denominated commodities, including silver. Apart from this, a sustained break below the $23.80-75 horizontal support was seen as a key trigger for bearish traders and further contributed to the downward trajectory.

Meanwhile, RSI (14) on the 1-hour chart is already flashing oversold conditions and assisted the XAG/USD to find some support near August 27 lows, around the $23.35 region. This should now act as a key pivotal point for short-term traders, which if broken decisively will set the stage for a further near-term depreciating move.

The next relevant support is pegged near the $23.00 mark, below which the XAG/USD seems all set the extend the slide towards challenging YTD lows, around the $22.20-15 region touched on August 8.

On the flip side, any attempted recovery move might now confront immediate resistance near the $23.75-80 support breakpoint. This is followed by the $24.00 mark. Some follow-through buying might trigger a short-covering move and push the XAG/USD beyond the $24.40 intermediate resistance, towards monthly swing highs, around the $24.85 region.

Silver 4-hour chart

Technical levels to watch