Spot silver (XAG/USD) prices broke out to fresh monthly highs on Wednesday, surging beyond Tuesday’s highs in the $24.30 per troy ounce area to hit the $24.50 mark, boosted as fears of a Russian invasion into Ukraine rose. At current levels near highs of the day in the $24.40s, silver prices currently trade with on the day gains of nearly 1.5%, with the bulls now eyeing a test of annual highs printed back in mid-January in the $24.70s.

The latest upside, much of which has come since the US open on press reports that the US had warned Ukraine that a Russian invasion could begin within 48 hours, saw XAG/USD break above a key downtrend that has been capping the price action going all the way back to July 2021. If the bullish breakout can last (signified if silver holds and closes near $24.50), that would be a bullish sign in the near-term. Some short-term speculators might even target a test of the Q4 2021 highs just under $25.50.

Ukraine declared a state of emergency on Wednesday and urged citizens to flee Russia, while Russia is evacuating its diplomatic staff from Ukraine, all while ceasefire violations in the Donbas continue to accelerate. The drumbeat of war is clearly growing and this may help keep silver prices underpinned in the coming sessions. The US dollar has been pushing higher on a safe-haven bid in recent trade, which could undermine silver, but any such weakness is likely to be short-lived.

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