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The price of silver is starting to move towards the $24.00 level once again, after moving just shy of the $24.40 resistance level during the height of the market’s concern over Ukraine.
Silver still has some way to travel before it officially starts to breakout technically, unlike gold has hit a 1-year high and moved above the $1,900 resistance level earlier this week.
Silver really needs to be breached the $24.80 level to really start to breakout, and to bring forward talk of silver accelerating much higher to levels such as $26.50 or even $27.40.
For me, the fate of silver is heavily linked with the Ukraine situation. If we see the market taking the current situation in its stride, it will probably be a negative for silver and risk-off sentiment.
However, if we see more military action from Russia, and a move towards the capital Ukraine, I would expect silver prices will start to breakout further and the $24.80 level breached.
According to the ActivTrader Market Sentiment tool, retail traders are more bullish towards the shiny metal than last week, with 85 percent of traders still predicting further price gains ahead.
This sentiment skew is still very worrying bearish for me. The technicals only become worrying if we witnessed market calm with the Ukraine situation and another rejection from the $24.00 area.
Silver short-term Technical Analysis
The short-term technicals for silver show that a massive head and shoulders pattern has formed. It still appears silver could be in the process of forming a final right hand shoulder to complete the bearish pattern, despite the Ukraine news.
A break above the $24.80 level could send a rocket under silver prices towards $27.00, which would invalidate the mentioned bearish price pattern. The Ukraine news will dictate.
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Silver Medium-term Technical Analysis
The daily time frame show that the shiny metal is slowly moving towards the top of a large triangle pattern, and bulls are largely struggling to accelerate the triangle test.
According to the triangle, a rejection from the top of the triangle could weigh heavily on silver’s technicals, while a move above $24.80 could force a technical test of $25.60.
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