Silver prepares to climb to $35 level for the first time since 2012

Silver prices rose by almost 3.5% last week and are poised to renew multi-year highs set in October. The target for buyers of the white metal may be the $35 per ounce mark, which the price last exceeded in the fall of 2012. From a technical standpoint, this scenario is supported by a medium-term uptrend and the absence of overbought conditions. The fundamental outlook and market sentiment also favor continued upside for silver.

As Ole Hansen, Saxo Bank’s Head of Commodity Strategy, notes, silver’s recent gains are partly fueled by a steady inflow of the metal into US warehouses amid concerns over potential tariffs. At the same time, if silver is exempt from import duties, it could trigger a market correction. Hansen sees this development as a good opportunity to build up long positions, as the metal has the potential to rise to at least $40 per ounce this year.

Meanwhile, analysts at Kitco News report a spike in social media campaigns pushing for large-scale silver purchases. Peter Kraut of SilverStockInvestor estimates that the net short position in the white metal market is approximately 223 million ounces, nearly a quarter of annual silver production worldwide. If a sudden price spike forces large hedge funds to close their short positions, silver prices could skyrocket to $50 per ounce.

Kraut draws a parallel to gold’s breakout above $2,000 per ounce level in late 2023. When this barrier no longer constrained the yellow metal, its upward movement received renewed impetus. A similar dynamic could unfold for silver. The next few days may prove critical, as the implementation of US tariffs coincides with quarter-end portfolio rebalancing by institutional investors. If silver avoids a steep pullback during this volatile period, the path to $35 could be open.

The RSI indicator remains below the overbought threshold, suggesting there is ample room for silver to extend its rally toward $35.

Consider the following trading strategy:

Buy silver at the current price. Take profit – 35. Stop loss – 33.6.