Silver Price Forecast: XAG/USD bulls should wait for a close above the $32.00 level

• The price of silver retreats further from its highest level since December 2012, reached on Friday.
• Recent repeated failures to find acceptance above $32.00 justify bulls’ caution.
• Any further decline towards $31.65 could be seen as a buying opportunity and remain capped.

The price of silver (XAG/USD) begins the new week on a weaker note and extends Friday’s pullback from the vicinity of the $33.00 level, its highest level since December 2012. The white metal remains depressed around of the round figure of $32.00 during the first half of the European session, although the mixed technical setup warrants some caution before opening aggressive bearish bets.

The recent repeated failures to find acceptance above the $32.00 level constitute the formation of a bearish multiple top pattern on the daily chart. That said, the oscillators on the daily chart remain comfortably in positive territory and support prospects for some buying at lower levels near the $31.65 area. This should limit XAG/USD’s decline near the horizontal support of $31.40-$31.35.

The subsequent decline has the potential to drag the commodity towards the $31.00 level. Some follow-through selling below last week’s low around the $30.90-$30.85 zone could make XAG/USD vulnerable to accelerating the decline further towards the $30.40-$30.35 intermediate support in route towards the psychological level of $30.00 and the 50-day SMA, around the $29.55 area.

Meanwhile, bulls need to wait for acceptance above the $32.00 level and sustained strength beyond the $32.25 resistance zone before positioning for an extension of a two-month uptrend. XAG/USD could then make another attempt to conquer the round $33.00 figure before rallying further towards the December 2012 high, around the $33.85 region.

Silver daily chart