Before going into the New Year’s holiday, silver traversed a quiet path near support levels which were intriguing, because the value of the commodity managed to sustain its higher values but appeared to have limited upside potential short term. However, since the start of this week, buyers have been active and have launched silver towards important resistance levels which are testing mid-term highs.
The resumption of speculative buying has pushed silver near the 27.760 price level in early trading this morning. This higher value has not been sincerely traded since early September, and that occurred when silver was coming off highs. It was in early August of 2020 when silver was trading at highs for this year and challenging long-term higher values. Though not close to record highs, silver is within the clutch of a strong bull market which has seen its value rise since April of 2020.
The current price of silver should be monitored closely as resistance levels are targeted. If higher values near the 27.920 level prove to be vulnerable, speculators will likely start to believe that the 28.250 mark could be a legitimate focus above. This level was tested in early September before selling crept into the commodity. In August of 2020, a high value of 29.150 was tested briefly.
The bullish trend within silver may prove to be attractive to traders who can use support levels below as stop loss ratios. Trading early this week has produced higher values and it has also increased support levels rapidly. Traders need to be careful with the commodity and not over-leverage their positions; this will also allow them to put their stop losses a little further away from current market values and allow silver to trade with mild fluctuations in order to take advantage of its current trend, which is displaying bullish momentum.
Speculative forces within silver appear to be strong. The commodity appears to have enough interest to potentially challenge early September highs again. Traders need to be careful to control their sense of greed within the silver market, because if the commodity is able to achieve new highs and challenge mid-term resistance levels it could spark volatile trading.
If silver does puncture resistance near term at the 27.920 level, traders should continue to look for upside price action to build. Traders can use the 27.500 level as a distant stop loss if silver should suffer a cyclical reversal downward. Cautious buyers may want to even use the 27.600 mark as a buying opportunity below, but if silver continues to build on its current momentum the market may not traverse this level short term.
Silver Short-Term Outlook:
- Current Resistance: 27.920
- Current Support: 27.500
- High Target: 28.250
- Low Target: 26.900
