Silver Price Forecast: XAG/USD consolidates above $41.00, bulls await trading range breakout

• Silver extends its consolidative price move in an over one-week-old trading range.

• The bullish technical setup backs the case for an eventual breakout to the upside.

• Weakness below the $41.00 mark could attract dip-buying and remain limited.

Silver (XAG/USD) struggles to capitalize on the previous day's positive move and oscillates in a narrow trading band, just above the $41.00 mark during the Asian session on Thursday. The white metal, meanwhile, remains confined in a familiar range held over the past week or so as traders opt to wait for the US consumer inflation figures before placing fresh directional bets.

Against the backdrop of the recent strong move up to the highest level since September 2011, the range-bound price action might be categorized as a bullish consolidation phase. Furthermore, the daily Relative Strength Index (RSI) has eased from overbought conditions, which, along with positive oscillators on the daily chart, suggests that the path of least resistance for the XAG/USD is to the upside.

However, it will still be prudent to wait for some follow-through buying and a sustained strength beyond the trading range hurdle, around $41.45-$41.50 zone, before positioning for any further gains. The XAG/USD might then accelerate the positive momentum towards reclaiming the $42.00 round-figure mark before eventually climbing to the next relevant resistance near the $42.65 region.

On the flip side, a corrective pullback below the $41.00 mark might continue to attract buyers and find decent support near the $40.55-$40.50 region. The said area represents the lower boundary of the aforementioned trading range, which, if broken, might prompt some technical selling and make the XAG/USD vulnerable to weaken further towards the $40.00 psychological mark en route to mid-$39.00s.

Silver 4-hour chart