Silver Price Analysis: XAG/USD remains depressed near $29.30-35 area, lacks follow-through

■  Silver drifts lower during the Asian session on Tuesday and snaps a three-day winning streak.

■  The mixed technical setup warrants some caution before placing aggressive directional bets.

■  A sustained strength beyond the $30.00 mark is needed to negate any near-term negative bias.

Silver (XAG/USD) struggles to capitalize on its modest gains registered over the past three days and attracts some sellers during the Asian session on Tuesday. The white metal currently trades around the $29.35-$29.30 area, down 0.45% for the day, and for now, seems to have stalled the recent recovery from its lowest level since mid-May touched last Wednesday.

From a technical perspective, last week's breakdown through the 50-day Simple Moving Average (SMA) was seen as a fresh trigger for bearish traders. That said, the subsequent bounce from the 61.8% Fibonacci retracement level of the $26.02-$32.51 rally and neutral oscillators on the daily chart warrant some caution before positioning for further losses. 

In the meantime, the $29.55-$29.60 area is likely to act as an immediate hurdle ahead of the 38.2% Fibo. level, around the $30.00 psychological mark. A sustained strength beyond the latter will negate any near-term negative bias and lift the XAG/USD to the $31.00 neighborhood with some intermediate resistance near the $30.30-$30.35 supply zone. 

On the flip side, the $29.00 round figure is likely to protect the immediate downside ahead of the $28.60-$28.55 region, or the 61.8% Fibo. level. A convincing break below has the potential to drag the XAG/USD towards the $28.00 mark. The downfall could extend further towards the $27.40-$27.30 confluence – comprising 78.6% Fibo. and the 100-day SMA.

Silver daily chart