Silver Price Forecast: XAG/USD refreshes multi-year top, looks to build on strength above $34.00

• Silver gains some follow-through traction on Monday and jumps to a fresh 12-year top.
• A slightly overbought RSI on the daily chart warrants some caution for bullish traders.
• Any meaningful corrective slide is more likely to get bought into and remain limited.

Silver (XAG/USD) advances to its highest level since October 2012 during the first half of the European session on Monday, with bulls now looking to extend the upward trajectory beyond the $34.00 round-figure mark. 

Looking at the broader picture, Friday's sustained breakout above the $32.50 supply zone was seen as a fresh trigger for bullish traders. That said, the Relative Strength Index (RSI) on the daily chart has moved above the 70 mark and points to slightly overbought conditions. This, in turn, makes it prudent to wait for some near-term consolidation or a modest pullback before positioning for any further appreciating move. 

Meanwhile, any meaningful corrective decline could be seen as a buying opportunity and remain limited near the $33.00 round figure. A convincing break below, however, might prompt some technical selling and drag the XAG/USD back towards the $32.50 resistance breakpoint, now turned support, en route to the $32.00 mark. The latter should act as a key pivotal point, which if broken might shift the bias in favor of bearish traders. 

On the flip side, the immediate hurdle is pegged near the $33.45 horizontal zone, above which the XAG/USD could aim to reclaim the $35.00 psychological mark. The momentum could get extended further towards the October 2012 swing high, around the $35.35-$35.40 region, though the technical setup warrants some caution for bullish traders.

Silver daily chart