Over the past few months, I have maintained a consistently bullish outlook on copper, anticipating a rebound from the $4 per pound support level and a strong rally.

This scenario has especially intrigued me because a rise in copper would provide a significant boost to silver. I believe copper's sluggish performance has been a key factor holding back silver's advance, as the two metals are highly correlated and arbitrage algorithms reinforce their relationship.

Last week, my expectations were validated when copper broke out of a major triangle pattern that had been forming since May.

Copper rebounded from the $4 support level in early January, rising rapidly and breaking out of the triangle pattern, a strong signal that further upside momentum is likely.

Several factors have driven this rally, including the implementation of technical buying programs, stockpiling in anticipation of possible tariffs, and expectations of a major stimulus program as China's economy continues to suffer.

In addition, strong demand from electric vehicles, data centers and renewable energy has further supported copper's strength.

A decisive break above this area should herald a full-blown bull market, which would also be very beneficial for silver. I will discuss this correlation in more detail later in the article.

This index is the average price of copper and gold, with copper adjusted by a factor of 540 to prevent gold from disproportionately influencing the index. The SSPI (Silver Price Index) closely mirrors the movement of the silver price, although silver itself is not an input.

Another key factor that could further boost the price of copper, silver and gold is a possible drop in the U.S. dollar index. Since commodities tend to move inversely to the dollar, a fall in the index would provide a strong boost to these metals.

Since October, the U.S. dollar index has experienced an unexpected and powerful rally, triggered largely by the growing awareness that Donald Trump would win the U.S. presidential election, which has put significant pressure on copper, silver and gold.

Now that President Donald Trump is officially in office, there has been a "sell the news" reaction as traders reassess whether the sharp rise in the dollar was overdone.

Notably, the relative strength index (RSI), a widely followed momentum indicator has shown significant weakening and divergence, a pattern that often precedes pullbacks. The U.S. dollar index recently fell below its uptrend line, which had remained intact since the rally began in October.

If it closes decisively below the critical support zone of 107 to 107.5, it should signal a deeper drop, an outcome that would send copper, silver and gold higher.

Another potential bullish catalyst for copper, silver and gold is the possibility of a massive stimulus "bazooka" from China to counter its deepening economic crisis.

With the collapse of the real estate and stock markets, an estimated $18 trillion of household wealth has been lost, an economic crisis similar to China's version of the Great Recession of 2008. Meanwhile, Chinese government bond yields have fallen to historic lows, signaling a deepening deflationary spiral.

Finally, with all this in mind, let's focus on silver itself. COMEX silver futures recently broke out of a consolidation pattern that had been forming since early November, a promising bullish sign.

The next key test is to secure a strong close above the $32 to $33 resistance zone, which has repeatedly acted as a barrier since May.

Finally, copper's breakout signals a further advance in the metal, which bodes well for silver due to its strong correlation.

At the same time, gold remains in a powerful bull market, creating additional support for silver, which tends to follow the signals of both metals. If the U.S. dollar index eventually experiences a significant pullback, it would provide another big boost to all three metals, given their inverse relationship with the dollar.

The final hurdle for silver is a decisive close above the key $33 resistance level; once that happens, a new bull market in silver should begin.

Jesse Colombo, Money Metals