Silver is one rally away from challenging its $49.7 record high

Silver prices secured a seventh consecutive week of gains, nearing the 2011 record high of $49.70. Despite two recent attempts by sellers to trigger a correction, quotes failed to break the $46 support on the hourly (H1) chart. Technically, the metal appears to be due for a pullback. However, bullish sentiment persists, and further growth is still likely to happen. A key test will occur near $50, where profit-taking on long positions is highly anticipated.

The daily chart shows that the RSI indicator has been in overbought territory for a week. On the H1 timeframe, this overheating has partially eased, and the MACD continues to rise without showing any reversal signals. In the short term, buying silver for a move toward the $49.7–$50 range remains a viable strategy, provided that prices stay above $47.7, bolstered by the nearby 50-period moving average that limits potential slumps. A decisive break below $46 would signal a more substantial correction.

The rally in precious metals is now in full swing, prompting analysts to quickly raise their forecasts. UBS, for instance, has recently revised its silver price target for the end of 2025 from $44 to $52 per ounce and for mid-2026 from $47 to $55. Nevertheless, the bank says the current gold-to-silver ratio above 80 is overvalued, and foresees it dropping to 76. Therefore, the latter's profit potential is greater than the former's.

Another sign of market tightness is evident in London Metal Exchange (LME) inventories. The monthly silver rental rate out there surged from 2.2% in mid-August to nearly 7.3% by early October—a more than threefold hike. Such a sharp uptick signals the physical supply is getting smaller, prompting the exchange to demand higher fees for the metal's use.

The trading plan down below may come into play: 

Buy silver at or above $47.70. Take profit: $49.7. Stop loss: $46.