Silver Price Forecast: XAG/USD slides below $32.00; downside potential seems limited
Silver kicks off the new week on a weaker note and snaps a three-day winning streak.
The technical setup supports prospects for the emergence of dip-buyers near $31.30.
Bulls might wait for a move beyond the 200-period SMA on 4H before placing fresh bets.
Silver (XAG/USD) attracts some sellers at the start of a new week and slides back below the $32.00 round-figure mark during the Asian session on Monday. The white metal, for now, seems to have snapped a three-day winning streak to over a one-week high touched on Friday, though the technical setup supports prospects for the emergence of some dip-buying at lower levels.
Last week's breakout beyond the 50% Fibonacci retracement level of the recent slump from the March swing high to a fresh year-to-date low touched last week was seen as a key trigger for bullish traders. The subsequent move high, however, struggles to find acceptance above the 61.8% Fibo. level. Moreover, oscillators on the daily chart are yet to confirm the positive outlook and warrant some caution before positioning for any meaningful upside.
Hence, it will be prudent to wait for some follow-through buying beyond the 200-period Simple Moving Average (SMA) on the 4-hour chart, currently pegged around the $32.55-$32.60 region, before placing fresh bullish bets. The XAG/USD might then aim to reclaim the $33.00 mark and climb further to the 78.6% Fibo. level, around the $33.20 area, en route to the $33.50-$33.55 horizontal barrier and the $34.00 neighborhood, or March swing high.
On the flip side, any further pullback is likely to find decent support and remain cushioned near the $31.35-$31.30 region, or the 50% Fibo. level. A convincing break below, however, might prompt some technical selling and drag the XAG/USD further below the $31.00 round-figure mark, towards the $30.55 area, or the 38.2% Fibo. level. The downward trajectory could extend towards the $30.00 psychological mark en route to the $29.55 region (23.6% Fibo.).
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