In just a week, for both silver and gold, everything has changed. When the bearish pressure seemed to be inescapable, the precious metals sector reversed the trend, with a massive rebound. Gold and silver jumped by over 5% last week, recovering a large part of the loss posted in the final part of September and in the first few days of October.
In particular, silver gained almost 10% from the recent low. The price rallied from $20.8 to $22.6 an ounce, with a renewed strength among buyers. From a technical point of view, the picture has significantly improved with prices surpassing several resistance levels ($22, $22.2 and $22.5).
The market’s mood changed quickly and in just a few days, we moved from an oversold situation to an overbought picture. This could increase the chances of seeing some consolidation movements in the next few days, even if the positive trend should still be dominant for silver.
Looking at the chart, in the medium term there could be space for further recoveries, with a potential target placed at $23.5, while the resistance zones of $24.5 and $25 are still farther out. In case of some retracements, it will be important that silver can hold the support levels of $22.2 and $22, in order to confirm the current reversal attempt.
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