Although silver could spike higher towards $8 from here, the odds favour a reaction short-term, not merely because of the outlook for gold and the dollar, but for its own reasons as well. Although the price continued incrementally higher last week, it has clearly been running into resistance towards $7.50 and upside momentum has waned. The RSI indicator is now at a normal overbought extreme, and the MACD indicator is approaching its normal overbought extreme. After the sharp rise earlier in the month it would be reasonable for the price to react back somewhat from the current overbought level, towards support in the $7.10 area, which would allow the short-term overbought condition to unwindand the moving averages to move into a more bullish alignment.

Otherwise, the sharp advance in the middle of the month augers well for continued progressafter an expected short-term reaction.