Silver (XAGUSD) is on the verge of a massive breakout.
I’ve been writing about the bullish scenario for XAGUSD since October 13th.
Back then, I said that silver was a “buy the dip market”.
And that remains true today.
Those who bought the recent dips above $22 are in profit or at breakeven in a worst-case scenario.
But the gains from XAGUSD may get kicked into overdrive soon.
Before we get to that, I want to call your attention to the monthly chart.
I’ve recently mentioned this, but it’s important to remember that 2020 has already been a breakout year for silver.
The fact that XAGUSD broke free from this multi-year consolidation in July can’t be overstated.
That alone was a significant bullish development for the metal.
Combine the breakout above with the bullish flag pattern on the daily time frame below, and you have a recipe for much higher silver prices.
However, XAGUSD bulls need to secure a daily close above $24.80 first.
That’s the top of this bull flag pattern and it also happens to be today’s high.
As long as silver is trading below channel resistance near $24.80, there is no confirmed breakout.
If buyers do close the pair above the channel top, the first area of resistance I’ll be watching comes in at $26.
You can see how $26 has been critical since late July.
Beyond $26 we have $30 and $35.