The first of December was an interesting day for silver. At first, prices fell to as low as 14.33, but this weakness turned out to be short-lived. By the end of the day silver prices climbed up to 16.80. The wave structure of this 2.5-dollar rise increases the odds in favor of a larger uptrend ahead.
The above-shown chart shows a nice five-wave impulse to the upside. However, every five-wave sequence is followed by a three-wave correction in the opposite direction. In terms of the Elliott Wave Principle, this means we are probably in the middle of the corresponding retracement, but as long as 14.33 stays untouched, the bulls are still in charge. If this is the correct count, the price of silver should be expected to find support in the face of one of the three key Fibonacci levels – 38.2%, 50% or 61.8%. After that, silver prices should exceed the top of 16.80.
