Silver Price Forecast: XAG/USD drops over 1%, bears need to wait for weakness below $33.00

• Silver kicks off the new week on a weaker note, albeit manages to hold above the $33.00 mark.

• The technical setup warrants caution for bears and before positioning for any further losses.

• A sustained break below the $33.00 mark should pave the way for some meaningful correction.

Silver (XAG/USD) attracts fresh sellers during the Asian session on Monday and currently trades around the $33.30 area, down nearly 1.25% for the day. The white metal, however, manages to hold above a one-week low, around the $33.10-$33.00 area, set on Friday, warranting some caution for bearish traders.

Moreover, technical indicators on the daily chart – though have been losing positive traction – are holding in positive territory. This further makes it prudent to wait for a convincing break below the $33.00 mark before positioning for an extension of last week's pullback from the highest level since October 2012. Some follow-through selling below the $32.75-$32.65 resistance-turned-support will reaffirm the negative bias and make the XAG/USD vulnerable. 

The subsequent downfall might expose the $32.20-$32.15 intermediate support before the white metal drops to the $32.00 round figure and the $31.70-$31.65 region. The downward trajectory could extend further and drag the XAG/USD towards the $31.00 mark en route to the $30.50 area and the monthly swing low, close to the $30.00 psychological mark tested on October 8.

On the flip side, the $33.65 horizontal zone now seems to have emerged as an immediate hurdle, above which the XAG/USD is likely to reclaim the $34.00 mark and climb further towards the $34.30-$34.35 supply zone. The momentum could extend further and allow bulls to make a fresh attempt to conquer the $35.00 psychological mark before aiming to challenge the October 2012 swing high, around the $35.35-$35.40 region.

Silver 4-hour chart