The price of Silver seems to be in the process of ending its large technical price correction after reversing sharply from the $20.00 area as the shiny metal followed other precious metals higher on Friday.
Silver rose last week after six straight down weeks. The rally came on the heels of a stronger US Dollar index and another cycle high in Treasury Yields in the United States.
The physical buying this year has been strong from central banks, and once the Fed concludes hiking rates, news of the pivot will spark an additional potential buying opportunity in silver.
Precious metals like gold have moved sharply higher this year. The Fed rate hikes and the China re-open and pushed down COVID-19 restrictions have caused strong risk-on sentiment.
Silver and gold usually share a strong price correlation due to the safe haven status of both metals and their correlation with the greenback. The US dollar rose sharply after the NFP jobs report last week.
Current sentiment metric towards silver show that traders are turning more bullish towards the price of silver. The ActivTrader market sentiment tool shows that 85 percent of traders are bullish towards silver.
While this is no one-way sentiment bias for silver price as retail have been heavily leaning on the buy side and may have been squeezed during the latest price dip. In my opinion this is a bullish sign.
Silver short-term Technical Analysis
The short-term technicals for the shiny-metal shows that silver has reversed to the downside after a large bounce from the bottom of a bullish descending expanding wedge pattern.
Looking more closely at the size of the price pattern and measuring the pattern, we are probably going to see a breakout in the region of $2.00 at some point. Taking silver towards $22.50.
Silver Medium-term Technical Analysis
The daily chart shows that silver price is in good shape over the medium-term horizon while the price holds above its 200-day moving average, close to $21.00.
The clearly visible range low and high is seen on the daily time frame over the medium-term. Silver needs to get back inside the $21.50 level to avoid a long-term range break to the down in March.