- Silver price fails to consolidate modest overnight rebound from the $31.00 vicinity.
- The technical setup supports prospects for an extension of the recent bullish trajectory.
- Any significant decline could still be seen as a buying opportunity and remain limited.
Silver (XAG/USD) price is struggling to gain significant traction and hovering within a tight trading range around the $31.80-$31.85 region during the Asian session on Thursday. Meanwhile, the white metal remains within striking distance of a four-month high touched on Wednesday and looks set to extend the bullish trajectory seen over the past two weeks or so.
From a technical perspective, the overnight sustained strength beyond the $31.40-$31.45 resistance zone follows the recent break of a short-term descending trendline resistance. This, coupled with the fact that oscillators on the daily chart are comfortably holding in positive territory and are still far from being in the overbought zone, validates the positive outlook and suggests that the path of least resistance for XAG/USD is to the upside.
Therefore, a subsequent move beyond the $32.00 mark, towards a retest of a decade high around $32.50 touched in May, seems a distinct possibility. Some follow-through buying should pave the way for a further appreciating move towards conquering the round $33.00 mark for the first time since December 2012.
On the other hand, weakness below the overnight swing low, around the $31.60-$31.55 region, is likely to find some support near the $31.25 area before the $31.00 mark. A convincing break below the latter could drag the XAG/USD pair to the $30.60-$30.55 zone. The decline could extend further towards the psychological $30.00 mark before the white metal drops to the $29.70-$29.65 zone, or the breakout point of the downtrend line resistance-turned-support.
The latter now coincides with the 100-day Simple Moving Average (SMA) and should act as a key pivot point, which if broken decisively will suggest that the XAG/USD has topped out in the near term and pave the way for a deeper correction.
Silver daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
