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Silver technicals still longer-term bullish

Kitco News

Kitco News has launched its 2021 Outlook, which offers the most comprehensive coverage of precious metals markets in the new year. Trillions of dollars were pumped into financial markets in 2020 and that won't come without consequences. Economists expect that investors will be Bracing For Inflation in 2021.

(Kitco News) - Market watchers who trade/hedge in futures need to pay close attention to the longer-term weekly and monthly continuation charts for nearby futures. History shows that strong-trending markets tend to see their prices gravitate toward historical highs or lows that are depicted on the weekly and monthly charts. Longer-term charts also tend to weed out the sometimes distracting “market noise” that can be seen on the shorter-term daily charts. Let’s take a look at the weekly continuation chart for silver futures, as it is providing some important technical clues.

The silver market in early 2020 hit a seven-year high of $29.915 and has since backed off that high. The weekly chart for nearby silver futures shows the choppy consolidation of recent weeks has formed a bullish pennant pattern. A move in prices above longer-term chart resistance at $27.50 would produce a bullish upside breakout from the pennant pattern, to then suggest much higher price potential in the coming weeks and months.

Silver prices have a tendency to track gold but as recent months have shown the silver market can actually lead gold prices higher. Look for sideways-to-higher price action in the silver market in 2021.

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