Silver’s Bullish Momentum Stalls: Is a Correction Ahead?

Silver Forecast Video for 11.04.23 by Bruce Powers

Silver further consolidates near trend highs reached last week and remains above support of both the downtrend line and most recent swing highs (Jan./Feb.), reflecting strength. Nevertheless, its 14-Day RSI momentum oscillator reached its highest overbought reading since August 2020 last week and has since turned down. Once it drops below the 70 line the turnover will be confirmed. As momentum weakens the chance for a correction increases.

Correction Possible While Underlying Strength Maintained

It is possible the silver retraces part of the prior upswing yet stays inside last week’s range. The high of the range is 25.12, and the low is 23.55. Support on a retracement is first seen around confluence of the downtrend line, 23.6% Fibonacci retracement, and previous weekly high from two weeks ago. That range is from around 24.15 to 23.85. If last week’s low is broken to the downside, silver next heads towards the 38.2% Fibonacci retracement at 23.07, followed by the 50% retracement at 22.44. The 34-Day EMA (orange) further marks the 38.2% zone as it is now at 23.09.

Correction Normal and Healthy at this Point

As of last week’s high, silver was up 27% in nineteen days. That is a strong move. So, it would not be surprising to see a correction longer than a few days before silver is ready to trend higher once more. Moreover, a minimum correction to the 23.6% price zone would be expected.

Could Silver Continue Higher?

Silver has been holding up well so far however, and it certainly could continue higher without an obvious correction first. If it does hold up and go higher first, a bullish breakout is triggered on a move above last week’s high of 25.12 and confirmed on a daily close above that high. At that point silver would next be heading towards a price range derived from the 127.2% extension (greater than 100% retracement) at 25.94 and minor swing high around 26.20.

The more significant price zone would be near the top of the upswing that topped March 7 of last year, at 26.93. Another target is higher around 28.73. Overall, silver is bullish, and the uptrend should continue, whether before a deeper correction or after.

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