Silver is currently priced around $38.50, bouncing back from a drop last week and close to the July high of $39.13. Key resistance points are at the important $39.00 mark and the July 14 high, while support is found around the $38.00 and $37.50 areas. Momentum indicators, like the RSI near 70 and a rising ADX, show a positive trend. The price of silver is benefiting from a weaker US Dollar, which is under pressure due to lower Treasury yields. Silver remains strong, trading above the 50- and 21-period EMAs, indicating buying interest. The RSI is close to the overbought level at 70, while the ADX at 20 suggests a strengthening trend. For silver to gain more upward momentum, it needs to break above the resistance zone of $38.80-$39.00. Key support levels are at $38.00 and $37.50, with resistance still at $39.00 and $39.13. On the daily chart, silver is trending upward within an ascending channel that has been in place since April. Key support is provided by the 21-day EMA at $37.18 and the 50-day EMA at $35.92. If silver stays above the $37.00-$37.50 area, the bullish outlook remains strong, with potential for a breakout towards $40.00. We see a clear opportunity for derivative traders due to the current bullish momentum. The price consistently staying above key moving averages—alongside a weakening U.S. Dollar after lower-than-expected inflation data—supports this positive view. The crucial level to watch is a solid break and hold above the $39.13 resistance. For those expecting further price increases, we recommend buying call options with strike prices at or above $40.00, especially if silver surpasses the July high. Recent Commitment of Traders (CFTC) reports show that money managers are boosting their net-long positions, indicating institutional confidence in this upward trend. This strategy allows traders to take advantage of a possible sharp price rise towards the next key benchmark. Alternatively, selling out-of-the-money put options with strike prices around the support level of $37.50 could be a wise strategy for collecting premiums. This tactic benefits from rising prices and time decay, supported by the strength of the 21-day EMA. The ascending channel since April assures us that these lower price levels will hold. The broader outlook backs this technical strength, as industrial demand remains very robust. The Silver Institute predicts that demand from the photovoltaic industry will contribute to 20% of total silver consumption this year, creating a solid demand base. This demand helps shield the price from minor speculative declines. While indicators show strong buying interest, the RSI nearing 70 signals some caution against jumping in too early. We prefer to wait for confirmation of a breakout above the $38.80-$39.00 range before making new aggressive moves. This strategy will help us avoid getting caught in a potential short-term reversal or consolidation period. Historically, once silver surpasses key multi-year highs, it can see quick price increases similar to the rallies of 2010-2011. A sustained move above the current resistance could mark the beginning of a larger upward trend. Thus, we are positioning ourselves for a breakout while using identified support zones to manage our risk.

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