Although at first sight silver looks short-term toppy, when one takes into consideration the outlook for gold and the dollar, the action over the past few weeks is viewed as a healthy period of consolidation, following the strong advance during the first half of February. Price action on the 2nd of this month was bullish, revealing significant underlying support, and moving averages are now in bullish alignment, increasing the likelihood of further significant gains.

When gold broke strongly higher about 10 days ago, silver didn’t really join in. This was because it had already risen a lot earlier in the month, and needed to consolidate those gains, a process that has continued up to the present.

Another rally to challenge the December highs at about $8 looks increasingly likely in coming weeks, especially if the dollar breaks below its "neckline" support at 82 on the index - see Gold Market update to view the dollar chart.