Silver in Bullish Consolidation
Silver ended April at $25.92 per ounce, gaining $1.50 (6.14%) for the month. Growing investment and industrial demand continue to support higher silver prices and have created supply shortages. Silver continues to benefit from the expansionary monetary and fiscal policies worldwide and silver’s critical industrial role in the environmentally friendly technologies of the "green revolution." Silver remains in a bullish consolidation in the form of flag or pennant formation (Figure 1). Typically, if these bullish flag formations hold together and break to the upside, the price objective can be significant. We will be prudent and wait for the pattern to be confirmed. The initial resistance will be $30, then $35 if the flag pattern is triggered.
Figure 1. Silver Chart Shaping a Bullish Consolidation Pattern (2019-2021)
Source: Bloomberg. Data as of 4/30/2021.