Silver Price Forecast: XAG/USD climbs to $31.30-$31.35 area, remains below 23.6% Fibo. level

• Silver attracts fresh buyers on Tuesday, though the setup warrants some caution for bulls.
• The overnight breakdown through the 23.6% Fibo. supports prospects for further losses.
• Bears need to wait for weakness and acceptance below the $30.90-$30.80 support zone.

Silver (XAG/USD) gains some positive traction during the Asian session on Tuesday and moves away from a multi-day low, around the $30.90-$30.85 region touched the previous day. The white metal currently trades around the $31.35 region, up 0.60% for the day, snapping a two-day losing streak and stalling its recent corrective pullback from the highest level since December 2012 touched last week.

From a technical perspective, the overnight breakdown through the 23.6% Fibonacci retracement level of the strong rally from the September monthly swing low favors bearish traders. Moreover, oscillators on the 4-hour chart have been gaining negative traction and support prospects for the emergence of some selling at higher levels. This, in turn, warrants some caution before positioning for the resumption of the recent upward trajectory witnessed over the past month or so.

That said, the overnight bounce from sub-$31.00 levels, or the vicinity of the 38.2% Fibo. level, and positive oscillators on the daily chart, suggest that the path of least resistance for the XAG/USD is to the upside. Any further move up, however, might confront resistance near the $31.80 horizontal zone ahead of the $32.00 mark. A sustained strength beyond the latter could push the XAG/USD to the $32.25 intermediate hurdle en route to the multi-year peak, around the $32.70 region. 

On the flip side, the $30.90-$30.85 region, nearing 38.2% Fibo. level now seems to protect the immediate downside, below which the XAG/USD could accelerate the fall towards 50% Fibo. level, around the $30.25 area. The downward trajectory could extend further toward the $30.00 psychological mark en route to the $29.70-$29.65 confluence support – comprising the 61.8% Fibo. level and the 200-period Simple Moving Average (SMA) on the 4-hour chart.

Silver 4-hour chart