Silver has been coming down for a while now, and honestly, this is the move I was expecting. Many of you have asked me whether this is the start of something bigger, so let me share how I see it.
After a five-wave rise from the July lows, silver has been pulling back from the August highs. I still see this as an ABC counter-trend move, especially after the recent breakout from a wave B triangle.
Quick reminder: wave C is the final leg of an ABC correction. It often unfolds in five smaller waves, and once it is complete, the market typically turns back in the direction of the bigger trend.
Right now, silver is trading around 58.82, which puts it inside the 60-58 support zone I'm watching for wave C. From here, I'd expect at least a temporary rebound, as long as price stays above the 54.80 invalidation level.
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I also want to stay realistic. Even a strong rebound toward 75 wouldn't automatically mean a new bullish trend has started. On the daily chart, this could still be only wave B of a second zigzag within a larger wave four correction from the all-time highs. That wave four may be moving into its late stages, but I can't rule out another retest of the $45-54 support region yet.
The bigger picture still looks constructive to me. On the monthly chart, I see silver in a strong rally from the 2020 bottom, ideally in wave (III) of a five-wave bullish impulse.
Also keep in mind that US CPI is out today, October 14, at 14:30 CEST. Inflation data can bring sharp swings into metals, so I wouldn't be surprised by some volatility around the release.
Key levels:
- Wave C support zone: 60-58
- Current price: ~58.82
- Invalidation: 54.80
- Possible rebound area: 75
- Lower support region if wave four extends: $45-54
Grega