Given the strength of silver’s big breakout last Fall, it’s asking a bit much to expect it to dig deep into this support before it takes off higher again. It could take off very soon or even immediately.
All this points to the potential for gold, silver, and the gold miners to begin another rise. Given recent divergences that are positive towards gold, silver and the gold miners, we could be getting closer.
Silver’s decline to near $54 is a classic move to test the previous breakout over $50. That said, we have considerable work to do to regain confidence and break out to the upside again.
The other option is that wave 3 is extending and that only wave i of 3 ended at the 121.56 high...This would suggest that silver is heading well above the $300 level in wave iii of 3.
When silver demand outstrips mining and recycling output, silver users must tap into aboveground stocks. That generally means rising prices to incentivize those holding it to give it up.
While tightness in the Indian market won’t likely impact the global price, it underscores a key dynamic in the silver market. There simply isn’t enough metal to meet demand.
