Silver Price Forecast: XAG/USD climbs to $31.80-$31.85 zone; upside potential seems limited

LONDON (March 4) 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.

FXStreet