The price of silver continues to benefit from geopolitical tensions and the improvement of the Chinese economic outlook.
The ounce of silver benefits from geopolitical tensions and improved economic prospects
The price of silver continued its momentum from Friday to reach a 12-year high of $34 per ounce on Monday. The price of silver is benefiting from its refuge aspect, but also its industrial aspect recently.
As with gold, concerns over the US election and escalating geopolitical tensions in the Middle East are supporting silver. Operators fear an escalation in tensions between Israel and Iran after Israeli forces killed the Hamas leader last week. Especially since Israel has already promised to respond to the Iranian missile attack launched three weeks ago.
The price of silver has also recently been supported by the improving economic outlook in China. After numerous fiscal and monetary measures announced by the authorities at the end of September, the central bank and the housing ministry implemented a series of measures last week aimed at easing the financial burden on property owners and regaining public confidence. The price of silver was also strengthened this Monday by the decision of the Chinese central bank to lower benchmark lending rates to unprecedented levels.
Weekly Silver Price Chart – Key Levels
Silver prices could soar in the coming weeks
From the point of view of technical analysis, the price of silver has just sent a signal in favor of a continuation of the basic upward trend by exceeding its high of the year at around $32, below which it has been consolidating since May.
This bullish signal follows a much larger one earlier this year when the price of silver surpassed multi-year resistance at $30 below which it had consolidated for more than three years.
The price of silver could therefore be on the verge of a major surge. The next resistance to watch will be the symbolic threshold at $40, then the second will be the all-time high recorded in 2011 at around $50.
Obviously, the evolution of geopolitical tensions and the global economic outlook will be crucial to the evolution of the price of silver, but technical analysis suggests that the price of silver could be on the cusp of a major surge. Especially since raw materials are known to jump considerably when they exceed long-term resistances.
The next resistance to watch will be the symbolic threshold at $40, then the second will be the all-time high recorded in 2011 at around $50.
| Entrée | Purchase above $32 |
| Objective | 40$ |
| Stop | 30$ |
| Risk/Return Ratio | >2 |
