The next move in silver
After a $50 price correction in 2011, silver underwent a deep correction from 2011 to 2020 and continued to consolidate within wide ranges. The graph above shows the sharp shadows marked as “Low” in the graph. These lows have confirmed the long-term bottom in the silver market. The big low was formed after COVID-19, when silver prices rose due to increased demand for safe-haven assets and industrial uses. Silver plays a key role in sectors such as electronics and renewable energy, where demand increased during the pandemic recovery, contributing to price growth.
Moreover, after forming an inverse head-and-shoulders pattern in the monthly chart from 2021 to 2023, the silver price is trying to rise above $30. The September 2024 monthly candle will attempt to close above this key level, and a breakout above will likely trigger a solid rise to $50. This outbreak is similar to the one that followed the 2008 crisis, as shown in the monthly chart above.
To further understand silver price behavior, the weekly chart below shows the overall price structure from 2020 to 2024. It is noted that the historical bottom in 2020 was formed using an inverted head-and-shoulders pattern. The consolidations from 2020 to 2024 have again led to bullish price action, again in the form of an inverse head-and-shoulders pattern. Silver has broken the neckline of this pattern and initiated a strong rise. After the breakout, the price forms a rounding bottom and prepares for the next strong rally above $30.