Silver Buyers Target New Highs After Record Rally
Market Overview
The silver market has resumed its upward momentum, driven by geopolitical tensions in the Middle East and a stabilizing U.S. Dollar Index. Following the release of inflation data that aligned with expectations, silver achieved a new high during Wednesday’s session. On Thursday, the metal is seeking to consolidate its weekly gains as traders assess its ability to maintain momentum amidst a shifting economic landscape.
Technical Analysis
On the daily chart, silver continues to exhibit strong bullish characteristics, propelled by heightened buying activity. Currently, the metal is advancing toward the key resistance at 21,829.63, corresponding to the 161.8% Fibonacci extension of the previous downswing. This level represents a critical barrier for buyers, requiring sustained momentum to achieve a decisive breakout.
Oscillators Confirmations
Should buyers successfully clear 21,829.63, the next targets lie at 22,185.90 and 22,572.02. These levels align with broader Fibonacci extensions and historical resistance zones, reflecting the potential for further gains in the bullish trajectory. Momentum indicators reinforce this outlook, with the Relative Strength Index (RSI) firmly in bullish territory and approaching overbought levels, signaling robust upward pressure. The Moving Average Convergence Divergence (MACD) indicator also maintains a bullish bias, with its lines continuing to diverge upwards.
Alternative Scenario
However, failure to break above 21,829.63 could result in a period of consolidation, with silver likely oscillating between this resistance and the immediate support at 21,506.93. A retreat below this support level could expose the metal to further downside risks, targeting 20,896.98 and potentially the November low of 20,320.60.
Key Levels
- Resistance Levels: 21,829.63, 22,185.90, 22,572.02
- Support Levels: 21,506.93, 20,896.98, 20,320.60
Key Events to Watch
Economic data will continue to influence silver prices as investors look to the U.S. Producer Price Index (PPI) report, expected to reflect an annual growth of 3.2% and a monthly increase of 0.2%. If these figures meet or fall below expectations, they may strengthen the case for a Federal Reserve rate cut at the upcoming meeting. Additionally, weekly jobless claims and the 30-year Treasury bond auction are anticipated to provide further insight into economic conditions, potentially impacting the precious metals market.
Conclusion
Silver remains on a bullish trajectory, with the immediate focus on overcoming the resistance at 21,829.63. A breakout would open the path to higher targets, while failure to sustain upward momentum could lead to consolidation or a pullback toward key support levels.
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