On October 13th, I wrote about a bullish chart formation for silver (XAGUSD).
The descending channel that has formed since the 2020 high at $29.80 appears to be a bullish flag pattern.
A breakout from this pattern alone could send XAGUSD much higher.
However, the pair is still consolidating.
That may seem relatively bearish, but I assure you, it isn’t.
The longer a market coils like this, the more aggressive the eventual breakout is likely to be.
Furthermore, silver’s rally earlier this year was the start of something much bigger, in my opinion.
Viewing the monthly chart above, you can see how XAGUSD has broken out of the multi-year consolidation below the $21 level.
A bullish breakout like the one we saw between July and August isn’t likely to dissipate anytime soon.
And pullbacks like the one since August are healthy.
They help to “reset” the market for the next leg up.
If the bull flag below is any guide, that next leg up will materialize following a daily close above channel resistance.
That level comes in near $24.70 as of this writing.
A close above that would open the door to $26.00 and perhaps $29.80.
The measured objective of the pattern below is $40, but XAGUSD has a chance to move even higher over the next few years.
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