Silver staged a notable rebound last week, with the metal advancing towards the $24.50 area as safe-haven assets came back into favour with investors.
Silver price technical analysis shows that buyers need to invalidate a head-and-shoulders pattern to encourage the next phase of the recovery – towards the $26 area.
Silver medium-term price trend
Silver prices managed to recover my nearly $2 last week, as the sell-off in precious metals that began in late-September finally showed signs of abating.
Silver technical analysis shows that further medium-term upside in the metal remains possible while the price trades above major trendline support, around $23.
Technical analysis on the daily time frame shows that the price has recovered above a major rising trendline, which denotes the uptrend in the metal since July 2020, and is now located around the $23.
Further upside towards the $26 to $26.40 area remains possible while the price continues to trade above the mentioned trendline.
The weekly time frame shows that metal has recently bounced from the 20 period moving average, around the $22.50 level, between the upper and lower Bollinger Bands.
Overall, continued price stabilization above the $22.50 to $23 area would suggest that the metal can continue to recover towards the $26.00 area, while a sustained loss of the $23 to $22.50 could cause a decline towards the $20 to $18 area.
Silver short-term price trend
Silver price analysis over the short term shows that bears need to keep the price below the $24.50 area to keep the recent down trend in play.
A bearish head-and-shoulders pattern appears to be forming across the lower time frames, following the recent upside rejection from the $24.50 level.
According to technical analysis, sellers need to move the price below the $23 level, to activate the bearish pattern, which holds a downside target of $1.50.
If bulls can force a sustained breakout above $24.50, then a large counter-rally towards the $26 area appears increasingly likely.
Silver technical summary
Silver price technical analysis shows that bulls need to rally the price above the $24.50 area this week to start a major counter-rally towards the $26 resistance zone.