Silver Price Forecast: XAG/USD flat below $31.50, upside potential appears intact

• Silver price lacks firm intraday direction and consolidates below $31.50 on Wednesday.
• The technical setup remains tilted in favor of the bulls and supports prospects for further gains.
• A break below the $30.90-$30.85 area, or the weekly low, will pave the way for deeper losses.

The price of silver (XAG/USD) struggles to capitalize on the previous day’s positive move and oscillates within a tight trading range, below $31.50 during the Asian session on Wednesday. Meanwhile, the white metal remains near the weekly low touched on Monday, although the setup favors buyers and supports prospects for resumption of the uptrend from the September low.

XAG/USD remains comfortably above the technically significant 100-day and 200-day simple moving averages (SMA). This, coupled with the recent breakout of a short-term descending trendline resistance and positive oscillators on the daily chart, validates the positive outlook and suggests that the path of least resistance for XAG/USD is to the upside. Therefore, continued strength towards the $31.80 horizontal zone, en route to the $32.00 level, seems a distinct possibility.

Sustained strength beyond the latter could push XAG/USD past the $32.25 intermediate hurdle, towards challenging the multi-year peak around the $32.70 region touched last week. The subsequent upward move will be seen as a new trigger for buyers and will pave the way for a new appreciation move in the short term.

On the other hand, the round figure of $31.00 now appears to act as immediate support ahead of the $30.90-$30.85 region, or the weekly low. The subsequent decline has the potential to drag XAG/USD further towards the $30.25 support zone. This is followed by the $30.00 psychological level and the 100-day SMA support near the $29.80-$29.65 region. A convincing break below the latter could shift the bias in favor of the bears and pave the way for a fresh depreciating move.

Silver daily chart