Silver Price Forecast: XAG/USD corrects from over one-month top, slides to mid-$30.00s

LONDON (January 23) Silver (XAG/USD) drifts lower on Thursday and for now, seems to have snapped a three-day winning streak to the highest level since December 13, around the $31.00 neighborhood touched the previous day. The white metal retains its negative bias through the first half of the European session on Thursday and currently trades around the $30.55 zone, down over 0.85% for the day.

From a technical perspective, the $31.00 mark represents a confluence hurdle – comprising the 100-day Simple Moving Average (SMA) and the top end of a multi-month-old descending channel. The said barrier should now act as a key pivotal point, which if cleared decisively should pave the way for additional near-term gains. Given that oscillators on the daily chart are holding in positive territory, the XAG/USD could surpass the $31.25 intermediate hurdle and climb to the $31.45-$31.50 resistance. The momentum could extend further towards reclaiming the $32.00 round figure en route to the December swing high, around the $32.25-$32.30 area. 

On the flip side, any further decline is likely to find decent support and attract some buyers near the $30.00 psychological mark. A convincing break below could make the XAG/USD vulnerable to accelerate the slide towards the $29.60 region before eventually dropping to test sub-$29.00 levels, or the multi-month low touched in December. Some follow-through selling could expose the descending channel support, currently pegged near the $27.35 region, with some intermediate support near the $28.30 area, $28.00 round figure and the $27.70-$27.65 zone.

FXStreet