Silver Price Forecast: XAG/USD skyrockets to a four-month peak above $32.00

• Silver jumps over 4%, hitting a four-month peak of $32.26.
• Bullish technical stance as RSI indicates continued upside potential for XAG/USD.
• Potential breakout above $32.26 could target the year-to-date high of $32.51, with further resistance at $33.00 and October 2012 peak of $35.40.
• Downside supports are at $32.00, followed by the September 20 high of $31.44, and additional support at $31.00.

Silver price skyrocketed during Tuesday's North American session and hit a four-month high of $32.26, posting gains of over 4% as the grey metal extended its rally sponsored by a drop in US Treasury yields and a weak US Dollar. The XAG/USD trades at $32.12 as Wednesday's Asian session begins.

XAG/USD Price Forecast: Technical outlook

Silver is upward biased and is set to continue climbing to challenge the year-to-date (YTD) high of $32.51. The Relative Strength Index (RSI) is aiming higher after peaking on Monday, indicating that bulls are stepping in.

if XAG/USD stays above $32.00 and punches through the $32.26 September 24 high, that could pave the way for the YTD high. Once surpassed, the next stop would be the $33.00 mark, ahead of the October 1, 2012 high at $35.40

On the other hand, if XAG/USD falls below $32.00, the next support would be the September 20 daily high at $31.44, before testing $31.00.

XAG/USD Price Action - Daily Chart