Silver consolidates close to the 2012 highs, poised for a breakout?

[Redator]

Metals have seen a strong multi-year performance, largely driven by post-COVID currency depreciation. The widespread use of Quantitative Easing (QE) and balance sheet expansions by central banks put fiat currencies under pressure, giving precious metals a solid fundamental tailwind.

In contrast, the 2022 global rate-hiking cycle helped restore some purchasing power to fiat currencies, temporarily capping gains in metals as tighter monetary policy reined in inflation expectations – but this effect has waned as Policy Rates have started to go down globally since their 2023 peaks.

A comparable period unfolded between 2004 and 2011, when Gold rose from around $400 to a high of $1,880 per ounce, propelled by QE1 following the 2008 Global Financial Crisis.

Gold has more than doubled its value since October 2022 lows and has dragged other precious metals upwards such as Platinum, Palladium or Silver.

Silver followed a similar trajectory, rallying from $6 to an all-time high of $49.80, before retreating in the years that followed. This correction was in part driven by a supply response, as miners ramped up production in response to soaring prices.

Read More: Australian dollar outlook as markets prepare for upcoming RBA rate decision

Silver Analysis from Monthly to 4H Timeframes

Silver Monthly Chart

Silver Monthly Chart, from 2002 to Today July 7, 2025 – Source: TradingView

The precious metal is currently trading in the 2012 range ($27 to $37) after breaking out from the previous $15 to $27 2020 to 2023 range.

Prices seem to be arriving close to overbought in the monthly chart, however the RSI is not there yet and the past few months of buying have printed strong thrust into the ongoing trend.

The metal is currently forming the premises of a monthly upwards channel, indicating potential resistance around $41 but has first to overpass the 2012 $37.50 highs to get there.

Silver Daily Chart

Silver Daily Chart July 7, 2025 – Source: TradingView

Lower timeframes give more clarity on how the current impulsive move up is going – a major push from Feb 2024 $24 lows took the metal to $32 before retracting and forming the ongoing steeper Weekly Channel.

Liberation Day created a sharp selloff from $34 to $28 before the general market recovery and Dollar outflows took prices to decade highs.

Prices have consolidated largely since the Israel-Iran $37.31 highs, taking the RSI from overbought to current neutral levels – as the 20 Day Moving Average finally caught up, the rest is to see if buyers use this technical support to generate another impulsive move.

Silver 4H Chart

Silver 4H Chart July 7, 2025 – Source: TradingView

Silver has been consolidating in a $2 range from $35 to $37 particularly since the Israel-Iran war created newfound demand for safe-havens and Silver, despite not being the first asset for flight-to-safety, can still be considered as such.

An interesting pattern can be in developments in the 4H Chart, as the selling from the weekly open just stopped at its 50 period MA, close to the middle of the range.

A failure to regain the lower part of the range substantially raises the probability of an upside breakout.

In the meantime, prices will have to at least hold this week's $36.15 lows.

Levels to add on your charts:

Support Levels:

• $36.40 MA 50 immediate support
• $35 to $35.50 last swing lows + 4H MA 200

Resistance Levels:

• $37 to $37.50 (2012 highs)
• Potential Resistance $38 to $38.5 (Fibonacci extension)
• Potential Resistance + High of Weekly Channel $39 to $40 (1.618 Fib extension)

Safe Trades!

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© {CURRENT_YEAR} OANDA Business Information & Services Inc.