Silver technicals still longer-term bullish

New York (Dec 24)  Market watchers who trade/hedge in futures need to pay close attention to the longer-term weekly and monthly continuation charts for nearby futures. History shows that strong-trending markets tend to see their prices gravitate toward historical highs or lows that are depicted on the weekly and monthly charts. Longer-term charts also tend to weed out the sometimes distracting “market noise” that can be seen on the shorter-term daily charts. Let’s take a look at the weekly continuation chart for silver futures, as it is providing some important technical clues.

The silver market in early 2020 hit a seven-year high of $29.915 and has since backed off that high. The weekly chart for nearby silver futures shows the choppy consolidation of recent weeks has formed a bullish pennant pattern. A move in prices above longer-term chart resistance at $27.50 would produce a bullish upside breakout from the pennant pattern, to then suggest much higher price potential in the coming weeks and months.

Silver prices have a tendency to track gold but as recent months have shown the silver market can actually lead gold prices higher. Look for sideways-to-higher price action in the silver market in 2021.

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