Silver rallies to a new high for 2024
- Silver breaks to a new high for the year and a 12-year high for the precious metal overall.
- The news of another stimulus package from the Chinese government helped push up the commodity.
- The escalating conflict in the Middle East and expectations of aggressive Fed easing further propel Silver.
Silver (XAG/USD) breaks to a new high for 2024 and a 12-year high overall on Thursday, after the Chinese authorities announced another 1 trillion CNY of extra stimulus on top of the package of measures already proposed by the People’s Bank of China (PBoC). China is the largest consumer of Silver in the world so the stimulus is expected to increase demand for the commodity.
Silver also saw gains from the escalation of the conflict in the Middle East between Israel and Hezbollah, and continued bets the Federal Reserve (Fed) will cut its key fed funds rate by another half a percent at its November meeting. Lower interest rates are positive for Silver because they increase the attractiveness of the non-interest bearing asset.
Technical Analysis: Silver breaks above key trendline and rallies
Silver has broken decisively above a key trendline and escaped from the range it was trapped in since May 2024.
It is now in an established short and medium-term uptrend and given “the trend is your friend” according to technical analysis theory, the odds favor an extension higher.
Silver Daily Chart
The next target on the radar is $32.94, the 0.618 Fibonacci ratio extrapolation of the C wave of the Measured Move pattern outlined prior to the breakout above the trendline. A really bullish move could eventually reach $34.18, the 100% extrapolation of wave C.
The Relative Strength Index (RSI) momentum gauge is not yet overbought, indicating there is probably more upside left in the market.
Author
Joaquin Monfort
FXStreet
Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.
