Silver Price Forecast: XAG/USD climbs to $31.80-$31.85 zone; upside potential seems limited
Silver gains some positive traction for the second straight day, though it lacks follow-through.
The technical setup warrants some caution for bulls and positioning for further appreciation.
Bears might wait for a convincing break below the 100-day EMA before placing fresh bets.
Silver (XAG/USD) attracts buyers for the second straight day on Tuesday and moves further away from a nearly four-week low, around the $30.85-$30.80 region touched last Friday. The white metal climbs to the $31.80-$31.85 region during the first half of the European session, back closer to the overnight swing high, and seems poised to appreciate further.
From a technical perspective, the XAG/USD showed some resilience below the 100-day Exponential Moving Average (EMA) last Friday. The subsequent move up validates the near-term constructive outlook for the commodity. That said, oscillators on the daily chart are yet to confirm a positive bias and warrant some caution before positioning for any further appreciation.
Hence, any further move up is likely to confront some resistance near the $31.65 region ahead of the $32.00 mark. Some follow-through buying beyond the latter could trigger a short-covering rally and lift the XAG/USD to the $32.40-$32.45 hurdle. Bulls might then aim to surpass the $33.00 round-figure mark and test the February monthly swing high, around the $33.40 area.
On the flip side, the daily trough, around mid-$31.00s, now seems to protect the immediate downside ahead of the $31.20 area and the $31.00 mark. The latter coincides with the 100-day EMA pivotal support, which if broken decisively will be seen as a key trigger for bearish traders and make the XAG/USD vulnerable to accelerate the fall towards the $30.25 support zone.
The downward trajectory could extend further toward the $30.00 psychological mark en route to the $29.55-$29.50 horizontal support. The XAG/USD could eventually drop to the $29.00 round figure and December 2024 swing low, around the $28.80-$28.75 area.
XAG/USD daily chart
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
