Silver took a pause before hitting a 12-year high at 34.8

Silver prices last week set a new high for the last 12 years, rising above 34.8. Against this backdrop, market participants rushed to take profits on long positions, which led to the price correction. Nevertheless, the current pullback doesn’t go beyond the medium-term uptrend, and the bulls have an opportunity to buy silver at more favorable prices. Probably the level of 34.8 won’t be the highest for a long time.

Experts of Heraeus in their last report paid attention to the situation with exchange-traded funds for silver. These ETFs, despite significant metal price appreciation, remain at last year's levels by the volume of invested funds. In other words, the situation with silver on the financial markets is still far from the state of euphoria and frenetic demand. Thus, the potential for an increase in the silver price is far from exhausted.

Analysts surveyed by Kitco News also remain optimistic about silver prices. In their opinion, the current rally has a solid fundamental basis, and is not just the result of speculation. Therefore, the closing of short positions on the white metal by banks and hedge funds is very moderate. For this reason, all the drawdowns in the value of silver in recent months have been successfully bought back.

Representatives of TD Securities see high industrial demand as an important driver of silver prices. According to analysts of the organization, the rally of this asset is just beginning. However, they urge traders to be patient and careful with purchases at local maximums. But corrective pullbacks of quotations, as the current one, can be a very interesting option for opening or building up long positions.

The RSI indicator on the daily chart of silver remains far from the overbought zone. From a technical point of view, the white metal has no obstacles for a new wave of growth. Thus, the first target will be the return to the level of 34.8.

The following trading strategy can be suggested:

Buy silver at the current price. Take profit — 34.8. Stop loss — 32.7.