Silver is at a critical juncture having succeeded in recouping all of the losses incurred as a result of the violent mid-April plunge, as it is now a whisker below the important resistance at this high. It remains very overbought on an intermediate basis, so the question is whether it will now consolidate/correct, or break higher again.
On the 6-month chart we can see this situation in detail. After silver recovered back towards the April high early this month, it started to roll over beneath the resistance and look like it was going to drop again, but it has held its ground and continued to test the resistance, absorbing supply at this level, and now looks poised to break higher again.
In strong support of the viewe that silver will break higher again are several key factors. The first is the continuing strength in gold, which is ignoring the sideways action in silver and continuing to forge ahead. The second is that the COT chart shown below reveals something extraordinary - the Commercials have reduced their short positions over the past couple of weeks as the price has rallied, which is the opposite of their normal behaviour. This is a potent bullish factor suggesting that silver will break higher. The third positive factor is that the silver lease rate shown further down the page has also turned strongly higher again indicating that the physical supply squeeze is set to continue.
So there you have it - the silver superspike looks set to continue, especially as gold appears to be limbering up for a superspike of its own.