SLV

Silver Price Forecast: Potential for 9-Year Highs Ahead

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Following a drop to a three-day low and a decline below the 8-Day MA earlier in Monday’s trading session, silver rebounds sharply intraday to retake the lows and the moving average. It continues to trade near the highs of the day at the time of this writing. The question is, will silver be able to sustain a rally to new trend highs and beyond? Unfortunately, we won’t know the answer until there is a sustained break above last week’s high of 29.80. Given Fridays price action, it is questionable, but given today’s price action, the possibility again exists.

Strong Rebound Following Early Weakness

Silver rallied strong on Friday, but it closed weak. And the weak close came after a 5.47 point or 22.5% advance as of last week’s high. That measures the most recent swing that began from the Marc 28 pullback low. However, today’s bullish price action could lead to higher prices and complete a brief pullback in the price of silver. Silver popped up to test highs from 2020 and 2021 last week with its trend high of 29.80. A decisive breakout above the 30.14 swing high from 2021 would put silver at a greater than 9-year high.

Monthly Bullish Pattern Dominates

In the bigger picture, and seen in the enclosed monthly chart for silver, a large bull flag is present. The sharp move prior to the flag, referred to as the pole, saw silver rise by 156.5% in less than five months. With what looks like a sustainable breakout of the flag that triggered last month, silver has the potential to see prices rise sharply again.

The measuring objective used to identify a target from the flag uses the distance in price seen in the pole and then projects that upward from the flag breakout area. There are two projected price areas then identified. One, based off a price match and the other from a percentage match. A 156.5% rally from the flag breakout, using 23.50, projects to 60.27. However, the dollar-based target is 41.7. That is 18.22 up from the flag breakout level.

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This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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