Silver Price Ascending Triangle Nears its Convergence Zone

Summary:

In this article, we look at the current performance of the silver price and why it is nearing a key breakout level in the near term

The silver price is in a tight range as traders wait for the outcome of Joe Biden’s $1.9 trillion stimulus package. The metal is trading at $26.60, which is slightly below last week’s high of $28.32.

What happened: Silver traders are mostly focused on the ongoing stimulus deliberations in Washington. While the House of Representatives has already passed the bill, there is no clarity on whether it will find support from any Republicans. Some moderate Democrats could also decide to vote against the bill.

Also, silver price is reacting to the relatively strong results by top mining companies. Yesterday, Fresnillo said that it reduced production by about 3% in 2020 due to Covid. The company, nonetheless, made it up with high prices and predicted ongoing challenges in Mexico. And today, Polymetal, a gold and silver miner reported a 28% increase in annual revenue.

Silver price forecast

The daily chart shows that the price of silver has been wavering recently. It has formed an ascending triangle pattern whose resistance is at $27.94. It has also had several false breakouts in the past few days. The price is also between the middle and lower lines of the Bollinger Bands. And yesterday, it tested the lower line of the triangle pattern.

Therefore, the price may retest the upper side of the triangle as it approaches its convergence point. However, a volume-supported below this line will invalidate this prediction.