The price of silver has moved to multi-week trading high, amidst a strong rally in safe haven assets due to fears over Russian and Ukraine tension, following report Russian ambassadors are exiting Ukraine.
International markets are largely reacting to the situation in Ukraine, which could turn into a more serious conflict with big international implications. The situation also has the potential to worsen.
Silver and gold prices tend to benefit during times of war, especially silver, which is used in artillery. With a physical supply glut underway, silver looks poised for further gains.
Furthermore, commodity prices are generally rising sharply, so precious metals are likely to benefit from his trend. Just to add to the bullish catalysts, the ongoing pullback in cryptos is starting to benefit gold and silver.
Crypto funds and meme-related stocks are also seeing strong outflows as Bitcoin and a number of top altcoins slump heavily into the red for the month. Metals are very much in favour again/
According to the ActivTrader Market Sentiment tool retail traders remain on the right side of the trade. The bullish sentiment bias remains unchanged with 94 percent of traders still predicting further upside.
I have my concerns about the extreme bullish sentiment. Potentially, bulls could exit the uptrend too early if silver crosses $24.00 and then explodes higher. It is noteworthy that retail traders typically exit bullish trends too early, so potentially, this could just be the start of the uptrend.
Silver short-term Technical Analysis
The short-term technicals for silver show that a breakout has taken place above key trendline resistance, and the metal is likely to remain bullish while trading above the $23.20 level.
According to technical analysis silver prices could stage a final move towards the $25.00 level. This could be a major turning point for silver, and failure here could cause a significant price collapse.
Silver Medium-term Technical Analysis
The daily time frame show that the shiny metal has formed a large head and shoulders pattern, which holds a massive downside price target of around $4.00.
According to technical analysis silver could be headed towards the $15.00 level if bulls are able to move the price under the $21.50 level. A break under the $21.50 should start the selling, and we could then see downside pressure accelerate.