Silver Price Forecast: XAG/USD bulls await move beyond $31.70-$31.75 horizontal barrier

LONDON (February 4) Silver (XAG/USD) attracts buyers for the second straight day on Tuesday and sticks to its positive bias, above mid-$31.00s through the first half of the European session. The white metal, however, lacks follow-through and remains below the $31.70-$31.75 barrier, or its highest level since December 12 retested on Monday. 

From a technical perspective, last week's breakout through the $31.00 confluence – comprising the 38.2% Fibonacci retracement level of the October-December fall and the 100-day Simple Moving Average (SMA) – was seen as a key trigger for bulls. Apart from this, oscillators on the daily chart have been gaining positive traction and suggest that the path of least resistance for the XAG/USD is to the upside. 

That said, it will still be prudent to wait for some follow-through buying beyond the $31.70-$31.75 immediate resistance before positioning for any further gains. The XAG/USD might then aim to surpass the $32.00 mark and test the next relevant hurdle near the $32.30-$32.40 area, nearing the 61.8% Fibo. level. The momentum could extend further towards reclaiming the $33.00 round-figure mark. 

On the flip side, the $31.10-$31.00 confluence resistance breakpoint now seems to protect the immediate downside, below which the XAG/USD could accelerate slide further towards the $30.25 support zone. This is followed by the $30.00 psychological mark. A convincing break below the latter might prompt aggressive technical selling and drag the white metal to the $29.55 region en route to the $29.00 mark.

FXStreet