Silver’s price is rising, getting close to the upper edge of a multi-month upward channel between $59.60 and $59.90. This follows a short period of consolidation. Analysts at Société Générale note that keeping the momentum is crucial. Last month, silver stayed above its 50-day moving average and exceeded the top limit of the consolidation phase, which has fueled this current uptrend. There’s no clear indication of a significant pullback, but the $56 mark, touched earlier this week, is the first support level. If this level breaks, it could lead to a short-term drop. Silver is maintaining its strong upward trend after breaking free from a recent consolidation phase. The price is now getting close to the upper boundary of an ascending channel, targeting the $59.60 to $59.90 range. This optimistic trend is gaining strength as we near the end of the year. This rally is backed by key economic changes in 2025. The Federal Reserve’s more cautious approach in the third quarter, along with November’s CPI data showing persistent inflation at 3.4%, has weakened the dollar and increased the demand for solid assets. In this environment, silver is an appealing option for traders looking for inflation protection. Industrial demand is also a key factor driving silver prices. Recent Q4 reports from global energy agencies indicate that solar panel installation estimates for 2026 have been raised by over 15%. This reflects the swift transition to green energy that has been underway since late 2024. Such structural demand strengthens silver prices, even without considering investment flows. For those trading derivatives, there’s a good opportunity to use options to manage risk and bet on further price increases. With the market stretched, buying call spreads with a strike price above $60 could be a cost-effective way to capitalize on a breakout while minimizing upfront costs. Rising implied volatility makes outright call purchases pricier. The important level to monitor on the downside is last week’s low of $56, which now serves as the first support line. A significant drop below this level would suggest diminishing upward momentum, possibly leading to a short-term pullback. Traders might think about buying put options or setting up bearish put spreads if prices fail to stay above this crucial support. It’s essential to consider the background of this year’s rally, as we are in a new price discovery phase. After breaking the multi-decade resistance level near $50 in spring 2025, the market has demonstrated remarkable strength. This historic breakout indicates that price dips are likely to attract buyers, but volatility is expected to remain high as the market defines a new range.

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