Silver: XAG/USD finds support above $23.20 and recovers modestly

• Metals rose during the American session; silver lagged gold.
• XAG/USD is well supported, for now, above $23.20.

Silver is marginally lower on Tuesday, as it remains far from the $22.10 bottom of the crash it suffered on Monday. During the American session, XAG/USD bottomed at $23.22. The metal again was able to find support around the $23.20 area and bounced to the upside.

The upside in silver remains limited despite gold rising almost $10 in a few minutes. Silver is following gold with the recovery but at a slower speed. Both metals managed to recovery despite higher US yields but supported by an improvement in risk sentiment.

Volatility eased during the last hours but is set to remain at extreme levels on the coming session, even as metal stabilize. On Wednesday, inflation data from the US is due, and it will be watched closely as it could affect expectations about Fed’s monetary policy.

Key support at $23.20

After the sharp decline on Monday, the outlook is still bearish for silver. In the very short term a break above $23.45 (downtrend line) should alleviate the bearish pressure; and would clear the way for a test of the daily high at $23.68.

On the flip side, XAG/USD has a critical support around $23.20. A break lower would expose the $23.00 area that if broken, should trigger a bearish acceleration.

Support: 23.20  22.80 21.89

Resistance: 23.78 24.45 24.85