Silver Price Breakout Confirmed by Morgan's Technical Rule, But Another Sudden Decline Warned

Silver prices have rebounded to around $66 after a brutal correction in mid-July that erased more than half of its value. The metal reached an all-time high near $121 in January before plummeting towards $55, only to recover and return to the $60 range by early August.

According to David Morgan, also known as the Silver Guru, the silver price has likely established its bottom and confirmed a technical breakout. However, Morgan warns that another sudden decline during August cannot be ruled out, citing historical seasonal lows in precious metals markets.

Morgan believes prices below $60 offered an unusually attractive opportunity within the wider silver market, stating 'anything under $60 was a gift.' He also considers gold below $4,000 to be attractive from a broader perspective. Morgan's technical rule confirms the silver price breakout, which requires several conditions to be met: the metal must cross above a horizontal resistance line, remain above that level for three consecutive days, and trading volume must stay above average during those sessions.

The Silver Guru remains bullish on both precious metals but expects silver to outperform gold on a percentage basis before the current cycle ends. He notes that industrial silver consumption has grown from 35% to 60% over the past 25 years, with technology now consuming a large portion of the annual silver supply.