Silver Price Forecast: XAG/USD skyrockets to 12-year high, approaches $35.00

• Silver prices hit 12-year highs at $34.86, clearing key psychological levels, despite rising US Treasury yields.
• Overbought RSI suggests room for further gains, with next resistance levels at $35.40 (October 2012 high) and $44.22 (August 2011 peak).
• Key support levels include $33.46, followed by the October 17 low of $31.32, in case of a pullback.

Silver price rallied to twelve-year highs of $34.86 on Tuesday, due to risk aversion and even though US Treasury yields are rising. At the time of writing, the XAG/USD trades at $34.86, up over 3% with traders eyeing the $35.00 figure.

XAG/USD Price Forecast: Technical outlook

XAG/USD has ripped through key psychological levels during the last three days, clearing the $31.00-$34.00 area, an indication that buyers are gathering steam. This means the uptrend remains intact and could extend towards the October 2012 peak.

Momentum supports buyers, though the Relative Strength Index (RSI) is overbought. Nevertheless, due to the steepness of the rally, the RSI's most extreme reading would be 80. Hence, bulls have enough room to spare to push Silver prices higher.

The XAG/USD first resistance would be $35.00. Once cleared, the next stop would be the October 2012 high at $35.40, followed by the August 2011 peak at $44.22, and ahead of the all-time high at $49.83.

Conversely, if XAG/USD retreats below $34.0, the first support would be the current week's low of $33.46. The next support would be the October 17 daily low of $31.32 on further weakness.

XAG/USD Price Chart - Daily