Silver has been looking more bullish in the short-term, as the shiny metals holds above the technically important $24.10 area, further improving the chances of more price appreciation ahead.
The prospect of further silver gains seems a reality, as the market is catching up to the story that rising inflation could soon cause silver prices to move higher as the metal is widely used in electrical goods and is of course a store of value.
Looking at the gold to silver ratio, silver is starting to outperform after underperforming for most of the year. The ratio is a key insight into which metal is likely to start trending and outperforming the other metal.
Silver bulls have drastically improved the chances of a major price rally after reclaiming the $24.10 level. Silver’s 200-day moving average, around the $25.00 level is the next big level to watch.
Additionally, a number of bullish patterns are forming across the lower time frames, and the Parabolic SAR indicator on the daily time frame is issuing its first big buy signal in some time.
Retail traders are once again massively stacked to the long side and believe that the shiny metal will continue to rise. This retail sentiment skew has been one of the reasons why the metal has struggled to rally all year.
The ActivTrader market sentiment tool shows that some 81 percent of traders are bullish towards silver right now. This is a 2 percent dip in bullish sentiment since last week.
Silver short-term Technical Analysis
The short-term technicals for silver show that a large, inverted head and shoulders pattern has formed after the shiny metal managed to stage a rally back towards the $23.20 area.
According to the overall size of the typically bullish pattern silver price could be due a further $1.50 rally in the short-term. Watch out for more gains towards the $25.00 level.
Silver Medium-term Technical Analysis
The daily time frame that a break above a large triangle. This could mean that silver is going to head towards the top of the triangle patterns in the medium-term.
According to technical analysis silver could be headed towards the $26.50 level if bulls are able to hold the price above the $23.50 level. A break above the top of the triangle would be huge for silver bulls.