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The price of silver is starting to move towards the $27.00 level after a major breakout in the price of gold above the psychological $2,000 resistance level propelled the shiny metal to a new 2022 high.
Silver still has plenty of scope to move higher in terms of playing catch up with the spectacular price gains that the yellow metal has posted this week, such is the close relationship both metals share.
If you want to know where silver prices are going you need to chart gold. If gold breaks the $2,060 resistance this week for conviction this week we could see gold hitting $2,400.
In terms of the targets to the upside for silver, a pending test towards the $30.00 level seems the most logical conclusion if gold prices head towards the $2,400 resistance zone.
With commodity prices surging it is entirely possible that these numbers will hit. Nickel prices more than doubled in one-day this week, further underscoring the massive repricing going on in the metals space.
According to the ActivTrader Market Sentiment tool retail traders are more bullish towards the shiny metal than last week, with 89 percent of traders still predicting further price gains ahead.
This sentiment skew is still very worrying for me. However, sentiment only become worrying if we witnessed market calm with the Ukraine situation and another rejection from the $27.00 area.
Silver short-term Technical Analysis
The short-term technicals for silver show that a massive head and shoulders pattern has been invalidated. It still appears silver could be in the process of testing towards the $30.00 level.
The break above $25.50 has sent a rocket under silver prices towards $27.00, which invalidates the mentioned bearish price pattern. Simply put, the Ukraine news 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 slowly moving towards the top of a large reversal, and bulls are largely still in control as the big technical test of $30.00 looks certain.
According to the size of the potential bullish pattern that silver could trade towards the $38.00 level over the medium-term. Gains above $30.00 would be hugely bullish.
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