Silver Price Hits a Record High Near $72

On 12 December, we noted that silver had climbed above $60. It took the market less than two weeks to advance further and clear the next psychological milestone at $70.

Today, XAG/USD reached $72, extending the sharp rally that began in the autumn. Gold prices have also been showing strong momentum.

The surge in precious metals has been driven by:
→ robust ETF buying from retail investors;
→ rising geopolitical tensions (media reports suggest the US has deployed additional military forces close to Venezuela);
→ reduced liquidity during the holiday period. Thin trading conditions often leave markets exposed to abrupt price swings.

Technical Analysis of XAG/USD

When reviewing the XAG/USD chart two weeks ago, we:
→ identified an ascending channel (marked in blue);
→ outlined the possibility of a pullback from the channel’s upper boundary.

Since then (as indicated by the arrows):
→ the price retreated twice from the upper boundary on 12 and 16 December;
→ on 17 December it broke above the channel;
→ on 19 December the former resistance acted as support, allowing buyers to consolidate above the blue ascending channel.

The current move is characterised by a steep upward trajectory (shown in orange), with the breakout above the $70 psychological level appearing decisive.

With silver trading this morning close to the upper edge of the orange channel and the RSI in overbought territory, the market looks vulnerable to a corrective pullback. Indeed, long holders may be tempted to lock in profits after a gain of nearly 30% since the start of the month.

That said, the unique dynamics of holiday trading could still fuel an attempt to push towards the $80 level.

Start trading commodity CFDs with tight spreads (additional fees may apply). Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.