The average investor is driven by news. And as much as the Federal Reserve might be criticized, this large group often makes it into the news. In other words, the Fed’s narrative that inflation is transitory seems to be believed by many investors.

The bad side of this is that Federal Reserve information is often released shortly before Christmas. However, it would not be a surprise if tapering started in early 2022. And maybe tapering might not just begin, but it may even be more aggressive throughout the year.

With such a step, perhaps the narrative would change from a “we aren't worried, it's transitory” approach to a “we need to deal with this” attitude regarding inflation. Therefore, this could easily be the fire to light the fuse of the silver rocket. We now see early signs of such a lift-off in recent silver price movements. Silver’s fuse is about to be lit.

Silver in US-Dollars Daily Chart: Low-Risk Entry Points

Silver in US dollars, daily chart as of Oct. 30, 2021.

It isn’t only that the overall narrative on transitory inflation is starting to get holes. We like the silver play because gold is somewhat in the limelight due to its battle with Bitcoin (BITCOMP). Consequently, this allows for silver to shine while it is typically in the shadows. On top of it all, we see clear evidence that commodities with industrial use are likely to land in a long-term bull market.

This is a play where everything is coming together. A multi stream both in fundamental and technical edges stacked upon each other. As of right now, we have identified four low-risk entry points on the daily silver chart, which are marked in bright green horizontal lines. We would take off 50% of the position near the $26 mark to mitigate risk.

Silver in US Dollars Weekly Chart: Good Risk-Reward Ratio

Silver in US dollars, weekly chart as of Oct. 30, 2021.

The weekly chart offers a low-risk opportunity as well. We illustrated a play that assumes an entry point in the lower third quadrant of the yellow sideways zone. It would provide for a risk/reward-ratio between 1:1 and 1:2 towards the financing point. We would assume an exit point for half of the position at the top near $28 of the yellow sideways channel.

With two more exits targets at $34.83 and $48.72, we find the weekly play to be conducive to our low-risk policy.

Silver in US Dollars Monthly Chart: Favorable Probabilities

Silver in US dollars, monthly chart as of Oct. 30, 2021.

With its considerable weight, the monthly chart provides the necessary overview. It shows how likely a success rate for a long-term play is. We find three dominant aspects supporting our aim for a bullish long-term play:

• Trend: The linear regression channel is marked in diagonal lines (red, blue, green). It shows a clearly bullish trend with a high likelihood of continuation.
• Support: The Ichimoku cloud analysis provides solid evidence of support to the recently established bullish tone in silver.
• Probabilities: Price highs from 1980 to 2011 built a double top price formation. As a result, this prevented prices from getting higher than the price zone marked with a white box.

Silver’s Fuse is About to be Lit

We find ourselves in challenging times, and certainly not only in market terms. One of the essential pillars to come ahead is bending in the wind yet staying flexible.

Should the Fed indeed raise interest rates to a degree not seen in the anticipated market price and come as a surprise, we might see a stock market decline of a substantial percentage. Consequently, this would temporarily drag silver prices down as well.