Silver Price Analysis: XAG/USD seems vulnerable, break below $31.00 awaited

• Silver drifts lower for the second straight day and seems vulnerable to decline further. 
• A bearish multiple-tops pattern formation validates the near-term negative outlook.
• Bears now await a sustained break below $31.00 before positioning for further slide.

Silver (XAG/USD) extends its retracement slide from the vicinity of the $33.00 mark, or the highest level since December 2012 touched last week and remains under heavy selling pressure for the second straight day on Tuesday. The downward trajectory drags the white metal to a one-week low, around the $31.00 round figure during the first half of the European session.

From a technical perspective, the recent repeated failures to find acceptance above the $32.00 mark constitute the formation of a bearish multiple-tops pattern on the daily chart. That said, oscillators on the daily chart – though have been losing traction – are yet to confirm the negative bias. Hence, it will be prudent to wait for some follow-through selling below the $31.00 round figure before positioning for any further losses.

The XAG/USD might then accelerate the fall towards the $30.60-$30.55 horizontal support before eventually dropping to the $30.00 psychological mark en route to the $29.75-$29.55 confluence. The latter comprises the 100-day Simple Moving Average (SMA) and the 50-day SMA, which if broken should pave the way for a further decline towards the $29.00 mark and the next relevant support near the $28.60-$28.50 region.

On the flip side, the $31.55 area now seems to act as an immediate hurdle, above which the XAG/USD could climb to the $31.75-$31.80 intermediate resistance and the $32.00 mark. Some follow-through buying beyond the $32.25 supply zone might then allow bulls to make a fresh attempt to conquer the $33.00 round figure before climbing further towards the December 2012 swing high, around the $33.85 region.

Silver daily chart