Silver has recently surged above the $29.8 mark, reaching new highs not seen since January 2021. However, this surge was met with selling pressure, causing the price to pull back to $29.40. Despite this setback, the price of silver does not appear to be overheated. On the daily timeframes, it has just entered overbought territory on the RSI, indicating potential for further upside.
Last month, silver continued to climb for three weeks after the RSI entered above 70 levels, before experiencing a two-week pullback in the second half of April. This correction aligns with a classic Fibonacci pattern, with a retracement to 61.8% of the initial rally from late February followed by a quick recovery. A break above recent peaks would signal a continuation of the uptrend, with a potential target of $33.
Long-Term Bullish Trends
Long-term trends also favor the bulls, as silver has consistently rebounded after dropping below the 200-week moving average over the past two years. Currently, the price is moving away from this line, suggesting further upside potential. This pattern mirrors the growth spurt seen in 2010-2011, when silver surged after surpassing key resistance levels.
With silver hovering around the $30 mark, investors are eagerly awaiting a breakout above this level to confirm the bullish sentiment. If silver can surpass $30 by the end of the week, it may pave the way for a long-term target above $50/oz, reminiscent of the peaks seen in 2011 and 1980.
While silver may have faced some resistance at the $29.8 level, technical indicators and long-term trends suggest that the precious metal is poised for further gains. A move above $30 could propel silver to new heights, with $50/oz as a potential target for the future. Investors should keep a close eye on key price levels and technical signals to capitalize on the potential rally in silver prices.