Silver Price Forecast: XAG/USD rebounds above $31 as fears of escalation in Russia-Ukraine war

• Silver price recovers mildly above $31.00 on heightened geopolitical tensions.
• Ukraine launched UK-supplied missiles in Russia, resulting in a fresh escalation in the war.
• Investors await the flash US S&P Global PMI for November.

Silver price (XAG/USD) bounces back slightly above $31.00 in Thursday's North American session after a corrective to near $30.80 on Wednesday. The white metal rebounds on fresh escalation in the Russia-Ukraine war, which forced investors to flee to safe-haven assets, such as Silver.

Geopolitical tensions renewed as Ukraine launched United Kingdom (UK)-supplied missiles into Russia, a day after it fired Army Tactical Missile System (ATACMS) provided by United States (US) President Joe Biden that fuelled risks of third world war.

Historically, the appeal of safe-haven assets, such as Silver, improves in times of uncertainty or heightened geopolitical risks.

The outlook of the Silver price remains uncertain as investors doubt whether the Federal Reserve (Fed) will cut interest rates again in the December meeting. The probability of the Fed to cut interest rates by 25 bps to 4.25%-4.50% in December has come down to 56% from 72% a week ago, according to the CME FedWatch tool.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, wobbles around 106.60. 10-year US Treasury yields hover around 4.40%.

Going forward, investors will focus on the preliminary S&P Global PMI data for November, which will be published on Friday. Economists expect the overall private sector activity to have improved.

Silver technical analysis

Silver price stays on track toward the upward-sloping trendline around $29.00, plotted from the February low of $22.30, which also coincides with the 200-day Exponential Moving Average (EMA). The white metal faces selling pressure near the 20-day EMA, which trades around $31.40.

The asset weakened after the breakdown of the horizontal support plotted from the May 21 high of $32.50.

The 14-day Relative Strength Index (RSI) slides to near 40.00. A bearish momentum will trigger if the RSI (14) sustains below the same.

Silver daily chart