The silver market is exhibiting strong bullish momentum. Last week, quotes surged above the upper boundary of the ascending channel, and on Monday, the metal hit a 14-year high of $47.170, fueled by a weaker greenback and worries over a potential US government shutdown. Despite this strength, technical indicators are now hinting at a correction.
This impending slowdown is indicated by the Stochastic Oscillator, which is positioned in neutral territory and sending a negative signal. A classic bearish divergence is forming: the %K line, at 64, is falling below the %D one, at 71, even as the price advances. This suggests the upward momentum is weakening and selling pressure is starting to mount.
Meanwhile, the On-Balance Volume (OBV) reached a new record peak, showing that the price surge was backed by increasing trading volumes. This alleviates concerns of a sharp downturn. Large volumes, in conjunction with the stochastic divergence, could herald consolidation. The steady rise of the OBV confirms the bullish trend's underlying strength, yet it also says that the market needs time to absorb the recent gains.
A weaker US dollar and the hope for further monetary easing from the Federal Reserve are currently creating positive momentum. Right now, most experts believe there's a 90% chance of a rate cut in October and a 65% chance in December. This environment is fueling more interest in safe-haven assets.
Concurrently, a supply shortage is offering additional support for the metal. The Silver Institute projects a supply deficit for the fifth consecutive year in 2025, coinciding with record inflows into bullion ETFs. Strong industrial and investment demand, combined with declining inventories, establishes a solid foundation for a long-term bullish trend, even amid potential near-term technical corrections.
Take into account the trading plan down below:
Sell silver at current levels or when the price approaches $48.00. Take profit: $45.30. Stop loss: $48.10.
This forecast is relevant between September 29 and October 6, 2025.
This content is for informational purposes only and is not intended to be investing advice.
