Never miss a story from Jeremy Wagner

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Jeremy Wagner

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points

-Bond yields are dropping producing a good environment for silver prices

-A close above $19.45 creates the largest 3 day gain since October 2015

-Risk can be set near May 2 high of $18.04

Silver prices are trying to produce its largest 3 day gain since October 2015. The technical patterns point to even higher prices, especially if we close on the highs today.

Silver prices are enjoying this environment of interest rate compression. Said another way, a falling US 10 year and 30 year yield makes silver and gold more attractive as they don’t pay any yield.

During this 3 day spike higher, silver price has surprised to the upside breaking through significant horizontal resistance my colleague Paul Robinson previously identified near $18-$19. This break above suggests more bullish potential.

Silver Prices Attempt Largest 3 Day Gain in 9 Months

Currently, silver prices are processing through an equal wave measurement (listed as the 1.000 level near 19.016 on the chart). This potential equal wave pattern may abate some gains, if only for the shorter term. Additionally, since this is a Friday of a very strong week up trend, we may see profit takers stepping in towards the close of the day so it is not an ideal long position at the moment. However, if these profit takers do not step in suggesting they are comfortable holding over the holiday weekend, then a continuation of the uptrend is the higher probability move.

Much above $19.33 (Equal Wave Pattern Extreme on the chart) and the equal wave pattern is stressed and we can set our sights on the next level of measured resistance near $21.05-21.50. Risk to the immediate bullish outlook can be placed near the May 2 swing high of $18.04. A move below that level creates overlap and begins to negate the impulsive look of the XAG/USD chart.

In summary, a close today above $19.45 produces the largest 3 day gain over the past 9 months. That would also place silver on a Friday high going into a holiday weekend, which is bullish. Lastly, a close today above $19.45 places the metal on the outer bounds of the equal wave pattern. If that equal wave pattern breaks, then it increases the probability of a move up to $21.05-$21.50.

Have you seen data on why traders lose? We distilled the data and created research on Traits of Successful Traders. You may be surprised that these traits are things you have control over.

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

To receive additional articles from Jeremy via email, join Jeremy’s distribution list.