Silver has always been an interesting choice for those looking to invest their capital. However, after the decline we saw in 2011, this metal seems to have slowed down and become somewhat forgotten. This year, we’ve seen strong movements in metals, and while Gold is trading near all-time highs, Silver still hasn’t come close to its own all-time highs. In this report, I want to discuss why Silver is one of the instruments that could surprise everyone in the coming months and perhaps even years.

Why Do I Always Choose Silver Over Gold for Retail Traders?

The first reason I always consider is price. The current price of gold is slightly above $2,515, while silver is below $29 per ounce. So, in terms of affordability, many more people can afford to buy Silver compared to Gold. In my 15-year trading journey, I’ve probably traded everything from FX, Stocks, Commodities, Options, and Futures to Crypto, but I have never seen a market as manipulated as Gold. If you enjoy day trading as I do, that can be a nightmare for your account. That’s the second reason why, in the past couple of years, if I want to day trade metals, I focus more on Silver.

What the Charts Say About Silver

We’re going to start by looking at the 2-day chart of Silver and identifying strong turning points. We’ll use the March 15, 2020 low as our starting point, and from there until the February 1, 2021 high, we can see a clear motive structure, which we’ll label as the potential end of wave I or A. From that high in February at $30.06 down to the low at $17.60 (August 29, 2022), we can see a simple Zig-Zag correction in wave II or B, so from 2020 until 2022, everything looks perfect. The moves after that are a bit choppy, but the market continued to make higher highs and higher lows, so we must go with the idea that we are still in a bullish move—not as strong as we’ve seen in Gold, but it’s bullish. When looking for potential projections, always aim for the worst-case scenario, not the best. In this case, the worst-case scenario is that the entire move from 2020 is just a larger correction, and from the structures we currently have in place, we must view this as another Zig-Zag correction (5-3-5). Based on this, the ideal target for wave C in a Zig-Zag is typically 100% of wave A, so our next ideal target for Silver is $36.00 per ounce.


Next, we’ll drop the timeframe to the 1-day chart to get a better idea of where we are in the Elliott wave cycle. As you can see from the Silver chart above, we’re viewing the current move as a potential wave [3], and within that wave [3], we should be in the final leg (5) of [3].

Primary Short-Term Elliott Wave Count

For the primary short-term view, we’ll go with the idea that the (4) leg of wave [iii] is a complete correction that ended on August 24 with a low at $26.40. From there, we’re tracking the final wave (5) of [iii] as currently under development, and while we remain above that $26.40 level, we should look for pullback plays towards $31.00 and higher levels.

Alternate Silver Elliott Wave Count

We’ve seen a bit of a slowdown in the markets over the past few weeks, with everyone waiting for the FED’s decision this month on US interest rates. This will have a big impact on many markets, including Silver. We’ve also seen a lot of choppy movements in Silver over the last few years, so we need to be prepared for more waiting before the move higher starts. For now, we’re viewing wave (4) of [iii] as a potential triangle that has just completed the first leg, and we’re using the idea of more sideways movement as our alternate scenario for this pair.

If we break below the August 24 low, you can focus on a potential double-three correction in wave (4), but for now, we’re not favoring that count.

Keep your trading simple—trade when you’re confident that the market is aligning with your expectations, and you’ll do well. If anything significant happens, I’ll update this report.

Regards,
Nicola