Following silver’s recent rally, an analyst has provided a possible path for the precious metal to hit a high of $50 in the coming months.
With the white metal building its price above the $30 mark, chart patterns indicate that silver has broken out of a descending broadening wedge pattern, a bullish technical formation that signals a reversal in trend, precious metals forecasting platform Gold Predictor noted in an X post on September 26.
To this end, the expert stated that the breakout had pushed the metal close to the $32.50 resistance level. If the metal successfully breaches this mark, the analyst predicts $50 will be the next destination.
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Indeed, a review of silver’s recent movement highlights how this bullish momentum has been building up in recent months. For instance, the metal formed a double bottom pattern around the $21.20-$21.30 range, steadily climbing toward the $25-$26 level. Silver approached the $30 level and formed a descending broadening wedge, a pattern typically preceding a bullish breakout.
At the same time, the relative strength index (RSI) points to positive divergence, suggesting the metric is moving upward while prices are consolidating. This is a bullish indicator, highlighting that momentum might favor the bulls.
Is silver losing momentum?
Meanwhile, another analyst with the pseudonym CzarVT, in an X post on September 25, suggested that with the metal hovering around the key technical level of $31.65, any break below this support could trigger a sharp decline toward the $30 range.
Based on the analysis, after attempting to claim the $32 spot, the metal seems to have lost momentum, with several technical indicators showing potential downside risk.
Silver’s short-term price movement, which has corrected, gives credence to losing momentum. As of press time, the precious metal was valued at $31.91, dropping by about 0.2% in the last 24 hours.
Silver’s key fundamentals
Although silver seems to be facing weakness in the near term, the metal has witnessed a price rally following the recent Federal Reserve interest rate cut. Given the prevailing anticipation of the Fed’s pivot toward easier monetary policies, the metal will likely see more gains in the long term.
Similarly, there is room for further growth due to the possibility of increased industrial use for the metal, triggered by China’s move to stimulate its economy. Silver’s bullish outlook is also supported by leading institutions such as banking giant Morgan Stanley, which has ranked silver and gold as bullish investments.
Silver’s performance aligns with the general commodities sentiment and precious metals gains led by gold, which is also trading at new all-time highs.
In conclusion, silver’s recent price action reflects an interplay of technical and fundamental factors. While short-term corrections and potential downside risks are present, the metal’s outlook remains bullish. However, investors should remain cautious of near-term volatility around the $30 mark.
