While gold’s rally has paused after reaching a new record high last week, silver is gaining momentum. Given that silver has been lagging behind gold this year, there is potential for silver to catch up and outperform in the second quarter.
From a fundamental perspective, both gold and silver, as precious metals, stand to benefit from the policy loosening of major global central banks. However, silver, being an industrial metal as well, could see additional benefits from the pickup in global growth and industrial demand.
Technically, silver needs to surpass a key resistance level around $26 first. The near-term outlook will remain bullish as long as the support at $23.99 holds. It’s possible that the consolidation pattern from $26.12 has already completed with three waves down to $21.92.
A decisive break of $26.12 will confirm the resumption of the upward trend from $17.54 (the 2022 low). In this scenario, the near to medium-term target would be the 61.8% projection of the move from $17.54 to $26.12 from $21.92, which stands at $27.22. A firm break above this level would pave the way for a new record high above $30 later in the year.
However, a rejection at the $25.91/$26.12 resistance zone or a break below the $23.99 support level would delay the bullish case and extend the consolidation from $26.12 with another downward leg instead.
