Silver Price Forecast: XAG/USD pares intraday losses, down a little below $32.00 mark

• Silver drifts lower and retreats further from a 12-year peak touched on Thursday.
• The setup favors bulls and warrants caution before positioning for deeper losses. 
• Any meaningful downfall is likely to attract some dip-buying and remain limited. 

Silver (XAG/USD) extends the overnight modest pullback from the $32.70 area, or its highest level since December 2012 and remains under some selling pressure during the Asian session on Friday. The white metal, however, attracts some dip-buyers at lower levels and currently trades just below the $32.00 mark, down 0.25% for the day. 

Meanwhile, technical indicators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone. This, along with the recent breakout through a short-term descending trend-line resistance, favor bullish traders and suggests that the path of least resistance for the XAG/USD is to the upside. That said, Thursday's failure to build on the momentum beyond the $32.45-$32.50 region warrants some caution.

The aforementioned area might continue to act as an immediate hurdle ahead of the overnight swing high, around the $32.70 area. Some follow-through buying should pave the way for a move towards reclaiming the $33.00 mark and lift the XAG/USD further towards the $33.45 intermediate hurdle en route to the December 2012 swing high, around the $33.85 region. 

On the flip side, the $31.60-$31.55 zone now seems to have emerged as an immediate support. Any further decline could be seen as a buying opportunity around the $31.25 area and remain limited near the $31.00 mark. A convincing break below the latter could drag the XAG/USD to the $30.60-$30.55 zone en route to the $30.00 psychological mark and the $29.70-$29.65 area, or the descending trend-line resistance breakpoint, now turned support.

The latter now coincides with the 100-day Simple Moving Average (SMA) and should act as a key pivotal point. Failure to defend the said support levels will suggest that the XAG/USD has topped out and pave the way for a meaningful corrective decline in the near term.

Silver daily chart