Peter Smith
Silver has caught the attention of technical traders as a textbook bear flag pattern takes shape on the daily chart. After getting knocked back from resistance above $115, the precious metal has been stuck in a tightening range near $94. This consolidation phase following a steep drop is exactly what bear flags look like - and if history repeats, another leg down could be coming. The question now is whether sellers will push through support or if buyers can flip the script.
Silver Consolidates After Sharp Rejection from $115 Resistance
Silver made a strong push into the upper resistance zone but couldn't break through long-term trendlines. That failure triggered a quick selloff that dragged prices down into the mid-$80s. Since then, the metal has been grinding higher within a narrowing wedge, forming higher lows and higher highs in an increasingly tight range. This pattern typically suggests the previous downtrend isn't over yet - if the lower boundary breaks, we could see another wave of selling.
The short-term moving averages tell a similar story. The steep upward slope from the earlier rally has now flattened during this consolidation, showing that buyers haven't been able to regain momentum. Volume has also dropped off compared to the initial decline, which is typical when price takes a breather after sharp moves. For context on recent support levels, Silver Price Tests Key 75-76 Support Zone as Breakout Builds provides additional perspective on where the metal found buyers.
What Happens Next: Key Levels to Watch for XAG/USD
The current setup suggests Silver remains vulnerable on the downside. If sellers push through the lower boundary of this wedge with strong volume, the bear flag would complete and likely send prices lower. On the flip side, a clean break above the upper trendline would invalidate the bearish setup and potentially spark a short-term recovery.
Traders are focused on how price resolves from this tightening range since it will likely determine Silver's next major move. Recent analysis in Silver Stalls at $81 as Momentum Fades Below $84 Resistance showed similar hesitation at lower levels. Meanwhile, Silver Price Analysis: Bearish Consolidation Below $100 with Support at $71.81 highlights deeper support zones that could come into play if the pattern completes to the downside.
Peter Smith
