Weekly Commodities Review - 08 December
Silver prices have posted some interesting moves in recent weeks that are worth highlighting.
We have previously discussed how silver spent much of Q3, 2022 retracing back down to the 50% retracement area of the gains made in the recovery from the pandemic.
From this 50% area, around $19, price action has since been able to move back above the 38.2% level around $21.75. Traditionally moves like this greatly increases the chances that over the longer-term price action will post moves back to the top of the major move, in this case up towards $30, rather than retrace all the way back to the lows
This is rarely a straight move, but now that price has decisively broken the $21.75 area this longer-term upside price target has been opened up. So that’s the positive news for the bulls.
The issue is that during the moves lower through 2022 a clear bear trend was created, parallel white lines on chart, and the upper end of this channel is currently around 25. Seemingly putting a medium-term resistance area ahead of this longer-term upside target.
But for the medium to longer term as the 50% area around $19.2 held, and the 38.2% level has been breached to the upside the longer-term investors can be more confident of the outlook, albeit on the understanding that if the near-term buying was to continue it may run into some resistance around the $25 area, as so many of the 2022 trend followers may well be tempted to take profits around that area.