Silver Prices Consolidate Above $68 as Bulls Remain Firmly in Control

Silver's price has leveled off after a strong August run that pushed it close to $70 an ounce. Despite no significant profit-taking, analysts believe the bulls remain in control.

Over the past week, silver added 6.59 percent, and its one-month gain stands at 19.57 percent. The twelve-month picture shows a 77.61 percent appreciation, but the three-month window reveals a 9.85 percent decline.

The technical setup is bullish, with analysts pointing to a wedge breakout and a key ceiling at $71.46. A decisive breach of this resistance could trigger an acceleration of the uptrend, while below it, silver remains confined to a tight band between $68.79 and $69.35.

The recent price action may be more than just a pause. Analyst Ronald Gehrt sees it as the completion of a three-part correction that weighed on silver since its late-January peak near $121. The current basing action around the 200-day moving average is seen as a constructive signal for the path ahead.

The proximate catalyst for August's surge was a decision out of the US Treasury Department, which announced it would double its buyback operations for long-dated government bonds to $4 billion per operation. The move has been interpreted by market participants as a signal of looser fiscal policy, an environment that historically favors precious metals.

Gold has also been leading the charge higher, breaching the $4,600 per ounce mark on Monday and touching $4,624. The precious metals complex is drawing support from heightened geopolitical tensions: the US has tightened sanctions against Iran, with Washington reportedly threatening what it calls the 'largest financial attack' in history.