Technical Analysis: Silver Price Drops From 14-Year High, Bulls Take Profits?

Spot silver prices edged lower on Thursday, climbing above $41.40 a troy ounce yesterday, as seen in the spot silver chart. The last time silver reached this level was in September 2011. The rise in spot silver was helped by the surge in gold prices to record highs.

In addition, Goldman Sachs analysts have released a mid-2026 gold price forecast, according to which spot gold could rise to the following levels:

In the baseline scenario, it rises to $4,000.

If 1 per cent of the US private Treasury market were to flow into gold, it would rise to $5,000, implying a loss of Fed independence, higher inflation and a weakening of the dollar's role as a so-called "reserve currency".

technical analysis

(4-Hour chart of spot silver, source: Internet)

By analyzing the volatility of spot silver, two upward channels can be identified:

Mid-term channel (marked in red): formed and continuously operating since the beginning of this summer.

Short-term channel (marked in purple): reflects the growth in silver demand over the past two weeks.

Against this backdrop, it is clear that silver has touched the resistance range formed by the upper tracks of these two channels. For short to medium-term traders, this signal suggests that spot silver may be in a state of "overvaluation", which could trigger a long profit-taking run.

Signs of weak demand include:

The relative strength index (RSI) shows a bearish divergence.

The price of silver fell sharply from the upper track of the channel (marked by the red arrow).

Bulls may find support at the middle and lower rail positions of the purple channel.

Based on the above analysis, we can speculate that the purple channel may still be able to support silver's upward momentum by virtue of inertia; at the same time, the silver price may form a bearish reversal pattern (such as a double top pattern) near the red channel, and then may pull back to the psychologically meaningful $40 mark - This position has previously seen an imbalance of buyer power (i.e. a concentration of buyer demand).

At 18:35 Beijing time, spot silver was reported at $40.916/ounce, down 0.64%.