Silver Price Forecast: XAG/USD climbs to $30.70 area; not out of the woods yet

• Silver kicks off the new week on a positive note, though the upside potential seems limited.
• The technical setup supports prospects for the emergence of fresh selling at higher levels. 
• A sustained strength beyond the $31.00 mark is needed to negate the negative outlook.

Silver (XAG/USD) regains positive traction at the start of a new week and climbs to the $30.70-$30.75 area during the Asian session, albeit it remains confined in a multi-day-old range around the 100-day Simple Moving Average (SMA).

The XAG/USD last week rebounded from the $29.70-$29.65 support zone, representing the 61.8% Fibonacci retracement level of the August-October rally. Moreover, the emergence of fresh buying on Monday favors bullish traders. That said, technical indicators on the daily chart are holding in negative territory and are still away from being in the oversold zone. Hence, any subsequent move up is more likely to confront stiff resistance and remain capped near the $31.00 round-figure mark. 

Some follow-through buying, however, will suggest that the recent corrective fall from the vicinity of the $35.00 psychological mark, or a 12-year peak touched in October, has run its course and pave the way for additional gains. The XAG/USD might then climb to the next relevant hurdle near the $31.70 area (38.2% Fibo. level) before aiming to reclaim the $32.00 round figure. 

On the flip side, the $30.20 region, followed by the $30.00 psychological mark could act as immediate support ahead of the $29.70-$29.65 area, or a two-month low touched on Friday. A convincing break below the latter will be seen as a fresh trigger for bearish traders and drag the XAG/USD below the $29.00 mark, towards the very important 200-day SMA support near the $28.80-$28.75 zone en route to the $28.40-$28.35 region, or the 78.6% Fibo. level.

Silver daily chart