How high can Silver rally this week?

Good question, isn’t it? In yesterday’s analysis, I focused on how low can gold, silver, and miners decline, and today I’d like to focus on the rebound.

The full version of today’s text includes the details for gold, silver, and mining stocks and in this free version I’ll focus on silver.

In short, the rebound is purely technical, nothing is really happening in the USD Index that would justify it.

The USD Index just paused, and in general it’s recovering from a severely oversold territory after invalidating its breakdown. In other words, it seems poised for further rallies. 

Holding 100 could reshape multiple markets

And when it rallies and holds above 100 – it will be then, when the big moves in multiple markets start. At least that’s my take on it, as 100 is not just a very round number. It’s also where we have the rising, long-term support line which was briefly broken in the past – and each time the USD Index then rallied back above it. The 100 level is also just above the declining resistance line below on the 2025 highs.

Once this combination of resistance levels is taken out, the investors and traders will turn their head to the poor-old USD and recall that it’s actually the currency of the most powerful nation on the planet (with the biggest army and the biggest potential for the AI-led growth) that’s still most prominently used in the international trade.

There are myriads of factors that one can choose to focus on and emotions decide which get into the spotlight of consciousness. And technicals are a way to analyze those emotions and see when the tides shift. I think we’re on the verge.

Anyway, getting back to the precious metals sector, as yesterday, I’ll start with silver.

The white metal has a very strong support at $58 and I think it will bottom there. Taking into account this along with the tendency for markets to double their previous move after a correction, provides us with a specific possibility.

Namely, silver could rally to about $93-$94 and top there and then decline sharply once again – perhaps this would be triggered by another wave up in the USD.

This might be a good opportunity to adjust your positions (details in today’s Gold Trading Alert).

Remember to diversify with bitcoin, which has just as bad (if not worse) situation. 

Market volatility calls for discipline

Also, if the volatility seems difficult to handle or the silver market seems to hot… Here’s an idea (clicking this link will take you to my LinkedIn page where I uploaded the video – I’d appreciate an upvote and a comment – and if you think it’s worth it, then perhaps a share):

Seriously though, before doing something like that, check with your doctor – I’ve been doing this for a long time. Even though it seems easy, it’s good to be prepared and start with less extreme approaches (like brief cold showers in the morning that you’d make longer over time). Just like trading – it’s good to start with a small position size before doing more advanced stuff with bigger positions. And – again, in analogy – even when advanced, don’t overdo it.

Having said that, I’d like to end today’s analysis just like I had ended the Friday issue:

If you took profits from your silver investments above $100 or close to my $120 target – congratulations – this one goes to your personal book of records.

There’s more to come.