Silver is under pressure following its record rally

A technical corrective phase is now following silver’s record rally to $54.45. Today’s opening price was $51.395, but it faced resistance and retreated to $51.600. The long upper wick on the daily candlestick indicates aggressive selling pressure above $52.000, which increases the likelihood of a short-term downward movement.

The technical setup confirms weakening bullish momentum. The Stochastic Oscillator (5, 3, 3) is showing a bearish divergence between the %K (62) and %D (67) lines, pointing to a slowdown in the uptrend. The Chaikin Oscillator, which hit a peak on October 17, is now declining—a signal of capital outflows. In addition, the On-Balance Volume (OBV) indicator has reversed downward after reaching a local high on October 16, confirming reduced activity from major market players.

The drop in silver prices comes as frenzied demand eases after a historic supply squeeze in London and strong buying interest in India during Diwali. Metal deliveries from COMEX warehouses in New York to London began to gradually smooth out the imbalance, which reduced premiums and diminished panic sentiment. At the same time, Donald Trump's statements about the “unsustainability” of 100% tariffs on Chinese imports and the upcoming negotiations with Xi Jinping are temporarily easing geopolitical tensions and lowering demand for silver as a safe-haven asset.

Despite long-term structural factors, including a supply deficit and increased consumption from the solar energy sector, current price dynamics indicate overheating. Given the current technical signals and a temporary improvement in market sentiment, the short-term outlook points to further declines, especially as investors take profits after the recent record highs.

Take into account the following trading strategy:

Sell silver at the current price, with Take profit at $48.000 and Stop loss at $54.500.

This forecast remains relevant between October 20 and October 27, 2025.