silver prices experienced a notable increase on Monday, reaching levels not seen in over a decade. As the trading session progressed in Europe, prices for silver (XAG/USD) surged, breaking through the $34.00 mark. This uptick followed a significant breakout above the $32.50 resistance level observed on Friday, which served as a catalyst for bullish momentum among traders.
Despite the positive trend, caution is advised as the Relative Strength Index (RSI) on the daily chart has surpassed the 70 threshold, indicating slightly overbought conditions. This development suggests that traders may want to anticipate a period of consolidation or a minor pullback before committing to further purchasing actions.
Should a substantial decline occur, it could be perceived as a buying opportunity, with strong support expected around the $33.00 level. However, a decisive drop below this point might lead to increased technical selling pressure, dragging prices back towards the transformed support level at $32.50 and possibly to the psychological mark of $32.00. This latter level is considered crucial, as a breach could shift the market sentiment toward bearish traders.
On the upside, the immediate resistance is identified near the $33.45 region. A successful move above this level could enable silver prices to aim for the significant psychological target of $35.00. If momentum continues to build, prices could extend towards the swing high from October 2012, roughly in the range of $35.35 to $35.40. However, traders should remain vigilant due to the current technical indicators, which indicate that some market correction may be imminent.
