Silver Price Prediction: XAG/USD sticks to modest gains near $27.65-70 area, 23.6% Fibo.

• Silver attracts buyers for the second straight day and moves away from a multi-month low.
• The technical setup supports prospects for the emergence of fresh selling at higher levels. 
• A sustained move beyond the 100-day SMA and $29.00 is needed to negate the bearish bias.

Silver (XAG/USD) builds on the overnight goodish rebound from the $26.45 area, or a three-month low and scales higher for the second successive day on Friday. The white metal climbs to a four-day peak, around the $27.75 region during the Asian session, though the positive momentum runs the risk of fizzling out rather quickly. 

From a technical perspective, the XAG/USD pauses near the 23.6% Fibonacci retracement level of the July-August downfall. The said barrier should now act as a key pivotal point, which if cleared might trigger a short-covering rally and lift the XAG/USD beyond the $28.00 mark, towards the 38.2% Fibo. level around the $28.50-$28.55 region. That said, oscillators on the daily chart – though have recovered from lower levels – are still holding deep in negative territory. 

Hence, any further move up is likely to confront stiff resistance and remain capped near the 100-day Simple Moving Average (SMA) support breakpoint, around the $28.75-$28.80 zone. This is followed by the $29.00 mark, which if cleared decisively will negate the negative outlook. The XAG/USD might then climb to the $29.45 intermediate hurdle en route to the 61.8% Fibo. level, around the $29.75 region and eventually aim to reclaim the $30.00 psychological mark.

On the flip side, the $27.30-$27.25 area now seems to protect the immediate downside ahead of the $27.00 mark. Any further decline might continue to find strong support near the $26.50-$26.45 area, or a multi-month low touched on Wednesday. Some follow-through selling, however, will be seen as a fresh trigger for bears and drag the XAG/USD to the May monthly swing low, around the $26.00 mark. The next relevant support is pegged near the $25.60 horizontal zone, below which the commodity could fall to the $25.00 psychological mark.

Silver daily chart