Is Silver Gearing Up for a Breakout?

By Tomasz Wisniewski|

Published: August 31 2023, 10:26 GMT+0

Is Silver Gearing Up for a Breakout?

Greetings to all traders and investors! In today’s technical outlook, we focus on the performance of silver, which has witnessed a fascinating turn of events recently. The month did not start well for this precious metal, but the tide turned around mid-August. Since then, we’ve seen a predominantly bullish behavior, with prices moving upward almost daily.

From a technical standpoint, silver found solid ground in the middle of August. It bounced off two key support levels. The first is a long-term uptrend line, delineated in black, which also forms the lower boundary of a symmetric triangle pattern. Simultaneously, the price found support at a horizontal level of approximately $22.4 per ounce, marked in green.

The recent uptick led the price to test two primary resistance levels. The first is the upper boundary of the symmetric triangle, also indicated in black. The second is a horizontal resistance line at around $24.4 per ounce, highlighted in yellow. The price reacted by bouncing off these levels, which potentially opens the door for a short-selling opportunity.

Given the current technical landscape, traders have two possible plays. If the price remains below the upper boundary of the symmetric triangle, a short position is warranted. On the other hand, if the price breaks through both the yellow and black resistance lines, a strong buy signal would be triggered, with a potential target at the blue zone—$26.1 per ounce.

While both scenarios are plausible, the probability currently tilts slightly in favor of a breakout above the resistance levels. Therefore, a watchful eye for this potential change in trend would be advisable for those interested in trading silver.