Silver Price Forecast: Upward To $30

In the wake of defensive buying following Russia’s invasion of Ukraine, silver has just triggered a key technical level which now points to higher prices.  In this article we will detail the expected moves for silver, referring to the following chart.

Silver Breaks Primary Downtrend

Silver has just broken the most basic yet powerful of technical levels, a primary downtrend, which would have hinted at lower prices for the remainder of 2022. Note the blue downward line which connects all the sequentially lower peaks since the $30 top in January 2021. This line represents a series of sellers who were exiting or short-selling the silver market at lower and lower intervals for the last 15 months.

However, something has happened over the last two weeks: those sellers became dislodged, and silver registered a higher peak than its previous highs of late-2021.

Downtrend breaks are important. They show us exactly that: the series of sellers in question are no longer present in a market.

Trend Retest Underway

Note that downtrend breaks do not necessarily mean that a market must start rising immediately. In the case of silver, this is exactly what has transpired.

Since breaking the primary downtrend two weeks ago at $25.20, silver subsequently peaked at $26.70, before retreating late this week back down to a close of $24.90.

We can see here that silver is thus trading at a level slightly below its trend break point in absolute terms, but still above the trend itself, which was declining in time. This retreat back to the former trend level is called a retest.   

A retest is when a market challenges an original group of buyers who caused the trend break to show up again. Presently, the broken primary downtrend comes in at $24.90, and this is exactly the level that silver closed at for the week. So that we may view the detail on this process, below is a zoomed-in portion of the last several months for silver:

What Follows a Retest?

Following a successful retest of a broken trend, we expect a market to accelerate in the opposite direction of the former trend. In this case, we expect silver to begin moving higher.

A series of waves is likely to unfold now, taking silver back toward the $30 level within the next 1-2 months.

The $30 level represents key overhead resistance dating back to August 2020. This level was challenged again in January 2021, and silver failed to overcome it on the second attempt.

Because the $30 level thus represents formidable resistance, we expect that silver will not exceed it again on pending next attempt. More likely, silver will need to back off, likely down to $26 - $27, before making a fourth and final successful attempt to break above $30 in Q3 of this year. This is the message of the charts as they currently speak.

What Happens Above $30?

Such will be the topic for a future article. Let us not get ahead of ourselves.

For the present moment, we are focused on watching for weekly closes above the former downtrend resistance line, currently at $24.90 and falling. On weekly closes, we want to see this level held. Anything else shows us that a new scenario is unfolding, for which we must alter our expectations.

For now, the highest probability based on visible evidence is that a primary downtrend break has occurred. The retest is currently underway. Following such, we expect an acceleration higher toward the key $30 resistance.

Silver will not break through $30 right away. However, it should do so later this year. Above $30, we will evaluate the next steps, which could include massively higher prices toward $50 or above.

Precious metals investors will want to use any nominal weakness now, and during a backoff from $30 several months from now, to finalize their silver-related investments for the coming years. Investors should not be chasing silver higher once it breaks $30, as volatility will increase notably at that point.

At www.iGoldAdvisor.com, we are preparing to purchase several silver-related investments. In addition to bullion, we plan to make highly-leveraged investments via private placements, which offer investors free warrants in silver mining companies in addition to their shares.

*******