Silver Prices Forecast: XAG/USD Climbs Above $30.50 As Rebound Continues

Silver is currently trying to settle above the $30.50 level as traders react to U.S. dollar’s pullback and general bullish sentiment in precious metals markets.

The price of gold is moving higher after a successful test of the $2350 level, providing additional support to silver markets.

Gold/silver ratio has been stuck in a range between 77 and 78. A move below the 77 level will push gold/silver ratio towards the next support at 75.75, which will be bullish for silver. It should be noted that fluctuations of gold/silver ratio served as the key catalyst for silver markets in recent months.

From a big picture point of view, it looks that traders remain bullish on silver and are ready to buy the metal when the price of gold is moving higher.  This is not surprising as silver is trading well below its historic highs that were reached back in 2011.

Obviously, many traders would like to enjoy a potential rally towards the $50.00 level, but they are worried that gold momentum could fade, leaving them at risk of a significant pullback in silver markets. Such worries explain the big fluctuations in gold/silver ratio in recent months. In case gold settles above the $2400 level, the market’s interest in silver will likely grow, pushing gold/silver ratio towards new lows, which will be bullish for silver.

The nearest resistance level for silver is located in the $30.90 – $31.20 range. RSI is in the moderate territory, which is bullish for silver markets. A successful test of the resistance at $30.90 – $31.20 will push silver towards the next resistance level at $32.25 – $32.50. This resistance level has been tested several times and proved its strength. In case silver manages to climb above the $32.50 level, it will gain additional upside momentum and move towards the psychologically important $35.00 level.

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