At present, silver is consolidating after reaching its highest level since February 2012, following significant gains in the previous session. It is trading just above the round level of $37.00.

Technical analysis supports the positive momentum: yesterday's breakout above the $37.00 level and the subsequent upward movement indicate the potential for further growth. However, the overbought Relative Strength Index (RSI) on the daily chart calls for some caution. Therefore, it would be prudent to wait for a short-term consolidation or a moderate pullback before entering new bullish positions.

Despite the current optimism, any correction is likely to attract new buyers and remain limited near the $36.85 level. This scenario could offer a good opportunity to enter long positions or strengthen existing ones.

However, a decisive break below this level could trigger technical selling, dragging the XAG/USD pair toward horizontal support at $36.35, on the way to the weekly low or to levels below the $36.00, which will act as a pivot point. A strong breakdown below this level could pave the way for a significant decline in the near term.

Nonetheless, the XAG/USD pair remains poised to rise further to test the 2012 high. A sustained move beyond that high would allow XAG/USD to target a return to the round level of $38.00. The bullish momentum could extend beyond that as well.