Silver Price Forecast: Pullback Holds Support, but Caution Remains Amid Resistance

Silver remains in a pullback that follows a new trend high of 32.96 that was reached two weeks ago. Last week’s low of 30.12 completed a 50% retracement and led to a higher swing low, relative to the September 6 low. Support that led to a bounce was not only seen around the 50% retracement but also included a successful test of support at the top downtrend line on the accompanying chart.

Trouble Around the 20-Day MA

If last week’s low continues to hold as support the bullish technical outlook for silver should continue to improve. However, silver’s recent relationship with the 20-Day MA suggests caution in the near-term. Silver recaptured the 20-Day MA on September 12, and it was followed by a sharp rally to the 32.96 high. In other words, the subsequent pullback to test support around the 20-Day MA failed. Therefore, further weakness may be forthcoming before an expected eventual resolution to the upside.

Optimism improved on Friday as silver managed to recapture the 20-Day MA again and close above it. But today’s lower high and lower daily low combined with a likely weak close, in the lower half of the day’s trading range, shows resistance around the 20-Day line. That could lead to another test of the downtrend line and 50% retracement zone as support, or a move lower.

Key Support at Last Week’s Low of 30.12

In the case that last week’s low is broken to the downside, the next lower potential support zone shows at 29.80 to 29.70. That price zone is identified by three indicators. A prior swing high from April begins the price range along with the 50-Day MA. At the lower end is the completion of the 61.8% Fibonacci retracement. Also, keep an eye on the internal uptrend line that connects to the September 6 interim swing low.

Big Picture Remains Bullish

The big technical picture for silver considers a long-term rising parallel trend channel that starts from the 2022 trend lows. There was a failed bullish breakout of the pattern in May and then again, this month. A third channel bullish breakout attempt may have greater success. It may come once the current retracement in silver is complete. Long-term targets, including the potential to reach a bullish flag target of 41.70, makes silver worth keeping an eye on as it works through a correction.

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