Sliver opened 4.5% above last week’s closing price on Monday and on the top of January’s peak of 27.91 before accelerating towards a new 8-year high of 30.07.
Despite the fast rally, the price seems to struggle to surpass the 2020 peak of 29.83, while not far above today’s peak, the 50% Fibonacci retracement of the 2011 downtrend at 30.70 could be a bigger challenge. With the RSI entering the overbought zone, there is another reason to keep some caution about any additional upside movement.
Should the bulls claim the 50% Fibonacci of 30.70, the next stop could be within the resistance territory of 31.80 – 32.40.
In the negative scenario where the price slides below 27.91, the 38.2% Fibonacci of 26.20 may attempt to add a footing ahead of the 50-day simple moving average (SMA) currently at 25.13.
Summarizing, silver bulls are pushing to exit the almost four-month-old neutral zone, though unless they claim the 29.83 – 30.70 territory, today’s impressive rally may prove short-lived.
