Is Silver Ready for the Next Stage of the Rally? This technical pattern shows upside potential up to $9

After spending several weeks trapped in a narrow trading band, silver appears to be gearing up for another potential breakout. Following a sharp rally from $37 to $54 earlier this year, prices were consolidating in a wide range between $46 and $54.

This prolonged consolidation phase is now drawing renewed attention from market participants, particularly as global risk sentiment shifts and technical frameworks begin to take shape.

According to Apoorva Sheth, Head of Market Perspectives and Research at SAMCO Securities, the recent price action has evolved into a classic cup and handle structure, a technical pattern often closely watched by traders for breakout signals.

Seth notes that the structure emerged as “each dip supported a 50% retracement near 46 and each rally stalled around 54”.

The technical setup is now nearing the critical stage, he explains. “The chart shows that the bulls have come back with force,” Seth notes, adding that the handle’s formation is almost complete.

Notably, Seth points to upside potential based on the height of the pattern: “The height of the pattern suggests that silver has room to add about eight to nine dollars from the breakout point, opening the way to $63–64/oz levels.”

Prices are currently testing the upper bound of the established range. According to him, a sustained close above the $54 level would confirm a new breakout from this pattern.

While prices have yet to break decisively, the broader trend remains intact.

According to Seth’s analysis, the formation of higher highs and higher lows indicates underlying strength. “The higher highs and higher lows indicate continued buying pressure on each correction. As long as the price remains above the $46 support zone, the structure remains strong and the decline is likely to be absorbed quickly,” he said.

Adding further perspective to silver’s historical behavior, Seth commented that “silver has already shown that it likes to trend after a period of rest.” This characteristic combined with the current setup suggests that the metal is preparing for the next phase of its uptrend.

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With prices nearing key levels and technical indicators aligning, silver continues to attract close scrutiny from traders and analysts alike. Whether a breakout materializes remains to be seen, but according to Seth’s reading, conditions are beginning to resemble past setups that have led to significant directional moves.

(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of the Economic Times).