As with gold, silver only consolidated at the most recent resistance zone. But unlike gold, silver’s resistance was significant. It pulled back as expected but that pullback was a shakeout below and back above support, and now with a higher short-term high 16.20 becomes key support.
As with HUI shown earlier, silver is at another zone of resistance but also as with HUI, it does not look like overly formidable resistance. Silver is overbought but we’ve been signing that song for a while now in the precious metals. Bull markets and strong bull phases get overbought.
With the break above 16.20 silver’s pattern measures to 18.20. Maybe it will find resistance here or maybe it will break out, get the silver pompoms waving en mass and then halt around 18.20 for a pullback. It’s all speculation, but right now silver is bullish. It’s also rising vs. gold but not near the previous high in the silver/gold ratio. But it bears watching for macro markets that are completely spooked by deflation right now.