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After a protracted period of stagnation, the silver market witnessed a remarkable breakout, setting the stage for what experts are now calling a "silver squeeze." Financial analyst Jesse Colombo reports that silver prices surged by nearly 7% last Friday, breaking through important resistance levels and pointing towards a potential upward trend.

The breakout was emphatic, with silver prices closing decisively above the $32.50 resistance level, accompanied by trading volumes more than double the previous week's average. Colombo attributes this to several bullish fundamentals, such as growing industrial demand and declining global mine production.

Several key indicators confirmed this breakout. Notably, silver priced in euros closed above the €30 resistance level, and gold, which heavily influences silver prices, has been showing strong momentum. Additionally, silver mining stocks have pushed past their trading ranges, reinforcing Colombo's long-standing prediction of a historic bull market.

Moreover, Colombo emphasized the potential for a short squeeze in the silver market. Swap dealers, mainly bullion bank trading desks, hold their largest net short position in eight years, equivalent to 194.43 million ounces or about 23% of the annual global production. This precarious position could drive prices even higher as traders rush to cover their losses, potentially costing bullion banks nearly $200 million for every dollar increase in silver’s price.

Colombo highlighted several conditions necessary to confirm the continuation of this rally. For instance, the spot price needed to close decisively above $32.50 with strong trading volume, a condition met last Friday. Additional criteria included silver priced in euros closing above €30 (it closed above €31), the synthetic silver price index posting a 1.21% gain, and gold showing upward momentum, which it achieved by breaking two key resistance levels.

Furthermore, copper prices finding support around $4.25 could provide an additional boost, and a strong close for the Global X Silver Miners ETF (SIL) above the $36 to $38 resistance zone, which also happened, would fortify silver’s upward trajectory. Another significant milestone achieved was the gold-to-silver ratio dropping below the 83 to 84 support zone, confirming silver's outperformance over gold.

The alignment of these technical and fundamental factors suggests the potential for significant price increases. Industrial demand for silver continues to rise while global mine production has been on the decline, leading to a structural deficit for the past four years. The Silver Institute forecasts a deficit of 215.3 million troy ounces for 2024, further tightening supply.

As the silver market dynamic evolves, investors and analysts alike will be keenly observing these developments. Jesse Colombo concludes with an optimistic note, hinting that silver prices might reach unprecedented levels not seen in decades.