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The price of silver is now starting to look more bearish after crashing towards the $24.50 level, and moving under a very important technical price zone, around the $25.50 level.
Silver still has plenty of scope to move higher, however, we need to see a combination of Ukraine conflict escalation, and Russian sanctions to really propel the shiny-metal higher.
It is also true to say that the action in gold is having a huge impact on silver prices. If you want to know where silver prices are going you need to chart gold. It is that simple right now.
Should we see gold price remaining depressed below the $1,930 level then we could see more gold weakness. However, if gold finds its way back towards the $2,000 level then a big breakout to the upside could happen in silver price.
In terms of the targets to the upside for silver, a pending test towards the $27.00 level seems the most logical conclusion if gold prices head towards the $2,000 resistance zone.
According to the ActivTrader Market Sentiment tool retail traders are more bullish towards the shiny metal than last week, with 90 percent of traders still predicting further price gains ahead.
This sentiment skew is still very worrying for me. Usually, we need the retail crowd to turn wholesale bearish in sentiment terms before we see big new price trends starting to take hold.
Silver short-term Technical Analysis
The short-term technicals for silver show that a massive head and shoulders pattern has been invalidated. However, silver is in trouble while trading under $25.50.
The break above $25.50 did send a rocket under silver prices towards $27.00, which invalidated the mentioned bearish price pattern. Moves around the $25.50 level will dictate the next move in the short-term.
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Silver Medium-term Technical Analysis
The daily time frame shows that the shiny metal is still above the top of a large triangle pattern, and bulls are largely still in control while this remains the case from a technical standpoint.
According to the size of the potential bullish pattern that silver could trade towards the $30.00 level over the medium-term. Losses under the triangle could prompt a decline back towards $20.00.
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