Silver Price Forecast: Correction Deepens; Key Levels for Support

Silver fell on Monday to a new pullback low of 30.42 before finding at least temporary support. That low was 4.45 points or 12.8% below the recent peak of 34.87. It was also slightly below the 50% retracement at 30.67 of the full swing starting from the August swing low, and right at the 61.8% Fibonacci retracement of the internal upswing.

Trading remains near the lows of the day at the time of this writing, and silver will likely close the day’s trading session below last week’s low of 30.83. And it will likely close at its lowest daily closing price in 21 trading days.

Next Support at Top Channel Line?

It looks like silver is heading next to test support around the top of a falling parallel trend channel. The top channel line identifies a potential support zone along with a prior interim swing low at 30.12. For now, 30.12 can be used as a proxy for the channel line.

If the top line fails to hold as support, the 61.8% retracement of the larger advance is at 29.67, along with a rising trend line. The 78.6% retracement level is at 29.24. However, if that level is reached it means that silver has fallen below both the top declining channel line and an internal rising trendline that begins from the February swing low.

Completed Five Wave Structures

Basic Elliott Wave analysis shows the recent top of 34.87 may have completed five waves of a rising impulse wave beginning from the September 2022 lows. Further, there is a smaller five wave price structure starting from the more recent August swing low at 26.47 that may have completed as well. Nonetheless, silver remains in a larger up trending price structure if it can stay above the 200-Day MA (blue), which is now at 28.56. Notice that the 200-Day line is below the rising internal trendline.

20-Day Confirmed Weakness, Crossing Below 50-Day MA

During the current decline both the 50-Day MA and small internal rising trendline failed to show support as silver fell hard through those levels last Wednesday. Bearish sentiment was subsequently confirmed as the 20-Day MA fell below the 50-Day line after being largely above it since August 19. Silver is clearly in a correction that may take a little time to work through given the decisive decline below the 50-Day line. Nevertheless, going forward, price behavior should provide clues as to when the environment is beginning to change towards a more bullish tone.

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