Silver Price Forecast: XAG/USD consolidates below $32.00 mark, bullish bias remains

• Silver fails to build on the overnight modest rebound from the vicinity of mid-$31.00s.
• The technical setup supports prospects for an extension of the recent upward trajectory.
• Any meaningful decline might still be seen as a buying opportunity and remain limited.

Silver (XAG/USD) struggles to gain any meaningful traction and oscillates in a narrow trading band, around the $31.80-$31.85 region during the Asian session on Thursday. The white metal, meanwhile, remains within the striking distance of a four-month peak touched on Wednesday and seems poised to prolong the upward trajectory witnessed over the past two weeks or so.

From a technical perspective, the overnight sustained strength beyond the $31.40-$31.45 supply zone comes on the back of the recent breakout through a short-term descending trend-line resistance. This, along with the fact that oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone, validates the positive outlook and suggests that the path of least resistance for the XAG/USD is to the upside. 

Hence, a subsequent move beyond the $32.00 mark, towards retesting a one-decade top, around mid-$32.00s touched in May, looks like a distinct possibility. Some follow-through buying should pave the way for a further appreciating move towards conquering the $33.00 round-figure mark for the first time since December 2012.

On the flip side, weakness below the overnight swing low, around the $31.60-$31.55 region, is likely to find some support near the $31.25 area ahead of the $31.00 mark. A convincing break below the latter could drag the XAG/USD to the $30.60-$30.55 zone. The downfall could extend further towards the $30.00 psychological mark before the white metal drops to the $29.70-$29.65 area, or the descending trend-line resistance breakpoint, now turned support.

The latter now coincides with the 100-day Simple Moving Average (SMA) and should act as a key pivotal 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 corrective decline.

Silver daily chart