Silver soars to decade high on powerful bullish surge

The silver market is now seeing a steady uptrend, with prices hitting $40.471 on Monday morning, a level not seen since 2011. This reflects sustained pressure coming from bullion buyers. The daily chart shows that growth accelerated following a decisive breakout above the $39.50 resistance, which served as a staging ground for the current rally.

However, the Stochastic Oscillator (69/67) on the same timeframe has been trending downward and exited the overbought zone it entered the previous week. Meanwhile, both price dynamics and the On-Balance Volume (OBV) continue to advance, indicating underlying buying interest. A developing bearish divergence between the quotes and OBV, as opposed to the Stochastic, suggests that the trend may be softening.

The viability of this uptrend hinges on the market's capacity to maintain high trading volumes. The indicator's stability or decline could signal an impending corrective phase, while a continued rise in OBV would support the case for renewed momentum. 

Fundamentally, expectations that interest rates will be cut by the Federal Reserve are driving the advance in silver—a development that weakens the greenback and enhances the metal's appeal as a safe-haven asset. In addition, a recent court ruling that deemed Trump-era tariffs illegal has reduced inflation risks and improved the demand outlook for silver in technological appliances and the renewable energy sector.

Here's a trading plan to consider:

Market players are better off keeping long positions in case there are corrections above the support level. The employment data for August, set to be published on Friday, is likely to have a substantial impact on the silver market. In the event that the report proves to be lacking in strength, this will give rise to heightened expectations for monetary easing, thereby providing support for the metal's growth.

The decline is a good time to buy. Take profit is set at $42.00. Stop loss is placed at $39.50.

This forecast is valid from September 1 to September 8, 2025.