Buying silver while it’s correcting before another rally to $43.5

As projected earlier, silver prices continued to rally. They rebounded from the medium-term uptrend line, surpassing the level of $40 per ounce for the first time since 2011. However, buyers have no intention of stopping there. The new 14-year high is currently set at $42.5, but this is unlikely to become the limit of the metal’s appreciation. That said, in the coming days, investors will have an opportunity to open long positions at more favorable prices.

Most indicators, including the RSI and MACD, point to overheated conditions. The technical setup suggests a local correction with targets near last week’s lows of $40.5. There will be a chance to purchase the metal at these levels, as further declines in price will be limited by the 20-day moving average. As long as it holds above the trendline and the $39.5 threshold, buying back the drawdowns remains the most rational strategy.

The outcome of the Fed’s meeting on September 17 could trigger a pullback in silver prices. Investors have already priced in a 25-basis-point rate cut, but some profit-taking on long positions often takes place following the event. This will not have any negative impact on the metal’s outlook and simply reflects traders’ cautious stance. Additionally, fundamentals for bullion appreciation remain solid.

The situation with silver stockpiles on the London Metal Exchange (LME) is becoming increasingly concerning. This year, the precious metal has been actively exported to the United States in anticipation of import tariffs, and ETFs are also seeing rising demand for the asset. As a result, only 20% of LME silver reserves are now available for physical delivery, which could create local shortages. If this scenario materializes, the rally to $43.5 will be quite fast.

Consider the following trading strategy:

Buy silver in the range of $40.5–$41.5. Take profit: $43.5. Stop loss: $39.5.