Silver saw a steep drop from $50 to $32 in the month of May and the rise post that has been in a corrective fashion.
Silver - rising wedge
The above chart of silver shows a rising wedge pattern with a typical throw-over to the upside. Yesterday's close was well below the bottom of the rising wedge and this should usher in a sharp down move for the industrial metal probably before the end of this month. Looking at the chart from an Elliott wave perspective, silver is probably in its powerful 3rd wave or C wave which has the characteristics of wave 3. At $26.7 the first leg of the decline from 50 would be equal to the move from 44.27 (and hence A=C), the August peak, which seems like the minimum drop that is likely for silver. Also the $26 zone is the previous 4th for Silver.
Naturally, some of us would be thinking, "what happens to gold now?"
Gold Daily Chart - Potential for a double top
Here too, it is obvious that Gold is running into troubled waters. A fake print above 1913 high, momentum disagreeing with the new high in price are all tell-tale signs of exhaustion. A close below 1763 or an intraday drop below 1705 would complete a double top for gold and should draw prices at the very least to 1480.
Given the fact that the Dollar Index too had a breakout to the upside just a few days ago, you might want to pay considerable attention to these signals in the precious metals space.
