Gold Shoots – But, Silver Not Out Of The Woods Yet. Does the Rally Continue ❓

While the rally on Friday certainly made metals bulls smile, I am not yet certain that the smiles will remain on your faces.  Yes, I do have a potential for the low to have finally been struck already, however, I do need the further proof of a strong 5-wave rally off a low to solidify that perspective.  And, I simply do not have that just yet.

The biggest issue I have is silver right now. It is hard to accept a double bottom as the completion of the corrective structure in silver, at least from an Wave Cycle perspective.  It may have just as easily been part of a larger wave [4] structure, as represented in purple in chart. And based upon that structure, we would have one more decline to complete this larger degree corrective structure.

However, should the market continue higher in the coming week, as outlined on the attached 8-minute chart (or even in a more aggressively bullish fashion with a series of 1’s and 2’s off the recent low), then we would have a much stronger indication that silver has begun its 3rd wave rally for 2024. But, it means the market MUST remain over the 23.10 region at all times right now. A break-down below 23.10 would strongly suggest that a lower low is still in the cards, with our next lower target being in the $21.21-21.80 region.

Of course, a break-out over 23.77, with follow through over 24.06 would likely be pointing us to the 25.65+ region to complete wave [i], as outlined on the 144-minute silver chart.

Now, I want to add a point here. Should the market provide us with a break-out sooner rather than later, I am going to strongly warn against playing any downside (Shorts) at any point in time while the market is in a 3rd wave. Extensions in the metals are often quite extreme, and attempting to play any downside at that time would be akin to standing in front of a freight train which is moving at full speed.

In the bigger picture, I am still focused on the strong potential that the market is setting up for a major 3rd wave rally in 2024. The coming week provides the metals complex the opportunity to prove that the rally has indeed begun. But, it still has some work to do before I can confidently claim that we have indeed begun that rally we expect in 2024.

                     Silver 8min

                     Silver 144min