Silver Price Forecast: Silver Hits New High Amid Bullish Trend, Faces Resistance Ahead

Silver rallied to a new trend high of 34.27 on Monday before intraday weakness took hold. Friday’s advance triggered a bull trend continuation signal on a rally above 32.96 and today’s gains further confirm the breakout. However, given intraday weakness, silver may close in a weak position, in the lower third of the day’s trading range and with a shooting star candlestick pattern.

Elliott Wave Points to 35.05

Adding simple Elliott Wave analysis to the current uptrend shows silver in a likely fifth wave position with the current rally. Waves are shown on the chart in purple with a target from the fifth wave around 35.05. That is assuming the fifth wave matches the first. Nonetheless, it provides another price level to watch the reaction. Also, notice that there is a 61.8% Fibonacci retracement level at 35.23, very close to the 35.05 target. Therefore, the 35.05 to 35.23 target zone looks like it has a good chance of being reached before the rally completes.

127.2% Extension Hit

Nonetheless, given today’s price behavior silver may pullback before continuing its ascent. Today’s high reached an area of potential resistance and so far, silver is seeing signs of resistance. A 127.2% extended retracement of the most recent decline from the May swing high was hit today at 34.14. A pullback could fall to test support around the prior resistance area of 32.96. Then, further down, is the prior swing high at 32.51. Critical to the bull advance is the 20-Day MA at 31.76. Notice that Friday’s new high breakout began from a successful test of support around the 20-Day line earlier in the day.

Large Bull Flag Points to 41.70

There is upside potential for silver. The bigger picture on silver shows a large bull flag pattern that began from the 2020 lows. A sustained breakout was indicated around early-March this year and it was followed by an accelerated advance. If the flag pattern continues to progress it shows a potential target for silver at around 41.70. This means that pullbacks will likely continue to be used by investors and traders to enter or add to positions, providing support for prices.

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