• Silver stages a goodish rebound from over a one-and-half-month low touched on Thursday.
• The technical setup favours bears and warrants caution before positioning for further gains.
• A sustained strength beyond the $25.30-40 region is needed to negate the negative outlook.

Silver manages to defend the 100-day Simple Moving Average (SMA) and regains positive traction on Friday, reversing a major part of the previous day's slide to the lowest level since March 30. The white metal maintains its bid tone through the early part of the European session and is currently placed around the $23.70-$23.75 region, up over 1% for the day.

The technical setup, however, warrants some caution before positioning for any further appreciating move. Against the backdrop of the recent breakdown through the $24.60-$24.50 horizontal support, which coincided with the 23.6% Fibonacci retracement level of the March-May rally, the overnight slide below the 38.2% Fibo. level favours bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone.

Hence, any subsequent move up is more likely to attract fresh sellers near the $25.00 psychological mark. This, in turn, could cap the XAU/USD near the $25.30-$25.40 supply zone. That said, a sustained strength beyond might trigger a short-covering rally and allow bulls to make a fresh attempt to conquer the $26.00 round-figure mark. The momentum could get extended further towards challenging the YTD peak, around the $26.10-$26.15 region touched earlier this month.

On the flip side, the 100-day SMA, currently pegged near the $23.35 area, now seems to protect the immediate downside, below which the XAG/USD could accelerate the fall towards 50% Fibo. level, around the $23.00 round-figure mark. The downward trajectory could eventually drag the commodity towards the $22.65-$22.60 intermediate support en route to the $22.30-$22.25 region, or the 61.8% Fibo. level