Silver Chartbook: Silver’s Breakout Rally Is Slowly Unfolding

Silver, often overshadowed by its more glamorous counterpart, gold, has recently captured the attention of investors worldwide. A potential breakout rally in silver prices has sparked excitement in financial markets, hinting at significant opportunities for those looking to diversify their portfolios into silver and silver-mining stocks.

The Spark of Silver’s Rally

After more than 13 years, silver is finally trading above USD 35 again! While moving within the range of USD 17.50 to USD 30ish for nearly five years, silver managed to break out above its strong resistance around USD 30 about year ago. Since then, bulls were making slow and sluggish, but ultimately steady progress. It took, however, three attempts to overcome the resistance zone between USD 34 and 35. Finally, on Thursday, 5th of June, silver bulls were able to assert themselves with determination and drove silver prices up to USD 37.31 within the following two weeks. Although the gains were considerable, one would have expected a bit more momentum. Instead, silver has been consolidating for about two weeks above USD 35, between USD 35.50 and USD 36.50.

Nevertheless, these recent movements indicate that silver is breaking out of a prolonged consolidation phase. After years of trading within a relatively narrow range and simply following the gold price development, silver prices are now in an accelerating bullish uptrend. Fortunately, we can assume that silver has moved into the trading range of USD 30 to USD 50 and should be on the way to attack the longterm resistance around its all-time high at USD 50.

Key Drivers of the Rally

Fundamentally, the breakout and ongoing rally are driven by a confluence of macroeconomic factors, industrial demand, and investor sentiment, all aligning to propel silver into the spotlight.

1. Macroeconomic Uncertainty: Global economic instability, including inflationary pressures, geopolitical tensions, and fluctuating currency values, has driven investors toward safe-haven assets. While gold often takes center stage, silver’s dual role as both a precious and industrial metal makes it an attractive hedge against uncertainty.
2. Industrial Demand Surge: Silver’s unique properties – high electrical and thermal conductivity – make it indispensable in industries like electronics, solar energy, and healthcare. The global push for renewable energy, particularly solar panel production, has significantly increased silver demand. With solar energy adoption accelerating, silver’s industrial consumption (especially driven by China and India) is expected to grow exponentially.
3. Supply Constraints: Silver supply has faced challenges, including mining disruptions and declining ore grades. These constraints, coupled with rising demand, create a supply-demand imbalance that supports higher prices.
4. Investor Sentiment and Speculation: Institutional and retail investors are increasingly turning to silver as a portfolio diversifier. Exchange-traded funds (ETFs) backed by physical silver have seen record inflows, reflecting growing confidence in silver’s long-term value.
5. Russia is officially adding silver to its national reserves for the first time, allocating billions of rubles annually through 2027 as part of a broader strategy to diversify away from the US dollar, respond to Western sanctions, and reinforce its financial defenses – an unprecedented move among central banks that could significantly boost global silver demand and prices, especially if other nations follow suit.

Military Demand

Silver’s military demand is substantial, highly secretive, and increasingly influential on the global market, yet it is often overlooked due to the classified nature of defense applications. Silver is critical in a wide array of military technologies, including missiles, satellites, radar systems, fighter jets, night vision equipment, and advanced communications devices, owing to its superior conductivity, corrosion resistance, and reflectivity. Since the mid-1990s, major U.S. government agencies have stopped reporting silver inventories, fueling speculation that military consumption may far exceed industrial demand from sectors like solar panels and electronics. This hidden demand, combined with record increases in military spending and escalating geopolitical tensions, is expected to intensify silver’s strategic importance and could contribute to significant supply constraints and price increases in the years ahead.

Why Silver? The Case for Investment

Silver’s appeal lies in its affordability and versatility compared to gold. While gold prices often reflect safe-haven demand, silver’s price movements are influenced by both investment and industrial factors, offering unique growth potential. Here’s why silver stands out:

• Affordability: Silver is significantly less expensive than gold, making it accessible to a broader range of investors. This lower entry point allows for greater flexibility in portfolio allocation.
• Volatility and Reward: Silver tends to be more volatile than gold, which can lead to substantial price swings. For risk-tolerant investors, this volatility presents opportunities for significant returns during bullish markets.
• Industrial Growth: The global transition to green energy, particularly solar power, positions silver as a critical commodity. Approximately 10% of global silver supply is used in solar panel production, a figure expected to rise as renewable energy adoption accelerates.
• Safe-Haven Appeal: Like gold, silver serves as a hedge against inflation and currency devaluation, making it a reliable store of value during economic turbulence. 

Silver in US-Dollar, Daily chart – Silver’s Breakout Rally Is Slowly Unfolding

Silver in US-Dollar, weekly chart as of June 30th, 2025. Source: Tradingview

Silver investors have had to exercise considerable patience in recent weeks, months and even years, as silver struggled to keep pace with the relentless momentum of financial markets. In fact, silver repeatedly failed to break through the strong resistance zone between USD 34 and USD 35.

Nevertheless, on June 5th, 2025, a clear breakout finally occurred, and silver quickly surged to USD 37.31 in the following days. Over the last two weeks, silver prices have undergone a healthy consolidation at a high level. The breakout above USD 35 remains confirmed, likely signaling the start of a vigorous catch-up rally in the coming months.

Support, Resistance, and Short-Term Prospects for Silver

As the daily stochastic oscillator, however, is on a sell signal, the ongoing consolidation might continue for a while. In the meantime, the lower Bollinger Band (USD 34.85) is converging with the current price action, now providing robust support around the USD 35 level.

On the upside, the next resistance zone is situated between approximately USD 37.50 and USD 38.50, marking the initial target for the ongoing breakout rally. Should this level be surpassed, further advances toward USD 40 and even the USD 44–45 range become realistic possibilities in the short-term.

Without a doubt, the primary long-term target for silver is the psychologically significant USD 50 level, last reached in May 2011. We anticipate this milestone will increasingly attract prices in the coming weeks and months. The current bullish chart pattern would only be invalidated by a decisive and sustained drop below the USD 34.80–34.50 range. While escalating geopolitical tensions or renewed pressure on equity markets—similar to the liquidity crisis triggered by panic in late March—could pose risks for silver, we do not expect such scenarios to materialize in the near future.

Conclusion – Silver’s Breakout Rally Is Slowly Unfolding

Fundamental as well as technical indicators clearly support the case for a continuation of the silver rally. The breakout above the USD 35-per-ounce resistance level has not only sparked optimism among analysts but is also poised to gradually unleash silver’s hyper-bullish potential as investors increasingly flock to this niche market.

However, until now Silver’s Breakout Rally Is Slowly Unfolding. Nevertheless, the more slowly the rally unfolds, the longer the precious metals bull market can last. A cautious, step-by-step upward movement ensures that the buying power of the bulls is preserved and prevents overheated, short-term excesses that could lead to rapid corrections. Even though silver investors are hoping for an immediate price explosion, it would be better if silver simply continues to slowly creep higher!

In any case, silver’s breakout rally marks an exciting moment for investors seeking to bet on silver’s “catching up”. With strong fundamentals, rising industrial demand, and favorable technical indicators, silver is well-positioned for a sustained upward trajectory towards our USD 50 short- to mid-term target. Only a drop below USD 34.80 to USD 34.50 would bring a bearish reversal on the chart.

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