Silver rises after brief correction
Silver rises after brief correction
After reaching a 12-year high earlier this week, silver experienced a correction, with prices dropping to $33.7 on October 23. However, the metal is now recovering and trading above $34.10.
As expected, any significant drop following such an impressive rally attracts buyers. If silver reaches the $34.25-$34.30 range in the coming hours, it could gain additional momentum for another test of this week’s high at $34.85-$34.90.
The next psychological milestone is $35.00, with further potential growth toward the 2012 swing highs of $35.35-$35.40.
On the downside, Wednesday's low of $33.45-$33.50 now serves as a key support area before the next possible drop to $33.00. Any further decline is likely to attract buyers on the dip, limiting silver's downside.
In tandem with gold
At the same time, the positive trend appears more favorable, driven by continued demand for safe-haven assets. Notably, on October 23, gold set a new record, rising to $2,755 per ounce.
Many view silver as undervalued, giving the bullish scenario a higher chance of playing out.However, traders should also keep in mind the impact of speculative capital on silver's price formation, which explains the high volatility of the metal over longer periods.
