Silver is building on the momentum around precious metals, with the commodity rising to its highest level in 12 years. However, an analyst has cautioned that the metal is facing a significant test following its latest rally.
Indeed, the white metal ended the latest session valued at $32.20, reflecting daily gains of 0.54%. In 2024, silver remains among the best-performing assets, rallying 36% year-to-date.
Following this surge, finance analyst James Turk stated in an X post on October 6 that silver is now at a crossroads that could determine its trajectory toward the $50 mark—an ambitious target that hasn’t been seen since the rally of 2011.
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According to Turk, this surge doesn’t come without challenges, and the metal is facing a crucial test. In this regard, the analyst highlighted whether shorts will push the price below $32, leading to a retest of support levels, or if the metal will continue to show strength.
From a technical perspective, Turk noted that silver shows a bullish pattern—an inverse head-and-shoulder pattern —suggesting a breakout could be on the horizon.
To this end, the buying zone between $22 and $24 has served as a strong foundation for accumulation, with the neckline forming around the $28 mark. Now, the price is hovering around the $32 level, signaling an attempt to break out.
If silver can maintain its current momentum, a path toward $50 may open, but this outcome heavily depends on how well it withstands downward pressure. Turk noted that this outlook will likely play out in the coming week.
“An important test for the precious metals coming this week, particularly silver. Next stop is $50,” he said.
The Relative Strength Index (RSI) adds to this uncertainty, which shows that while momentum remains robust, silver is approaching overbought territory, hinting at a possible pullback before the next major move.
Silver set for major breakout
In keeping with the optimistic outlook, an analyst identified as Winston Wolfe stated in an X post on October 4 that a bullish signal has emerged in the silver market, as a quarterly breakout on the logarithmic chart confirms the start of a potential bull run. The last time silver experienced a similar breakout, it led to a 1,000% rally over seven years.
The analysis highlighted the infamous “Hunt Brothers Chaos” in 1980, followed by a quarterly breakout in the early 2000s that paved the way for an extended multi-year bull market. If history repeats itself, the current breakout could start another multi-year bull market, with the potential for dramatic price increases.
What is next for silver price
With silver experiencing one of its ‘hottest bull markets of all time,’ attention is on whether the metal can push toward the $50 mark. As reported by Finbold, analysts at Gold Predictors noted that if the commodity manages to break past the $32.50 resistance, it will be in an excellent position to reach the $50 mark.
It’s worth noting that silver, alongside gold, has been rallying in recent months due to several factors, such as geopolitical tensions in the Middle East. Silver’s momentum has also been magnified by increasing bets on the metal’s industrial use in China following the rollout of a stimulus package to boost the economy.
