Silver rose 2.8% on Friday, an important signal that the bearish momentum that saw prices drop more than 13% in three weeks is over.
Silver, like most developed markets, has Mondays off, but we can speculate that Friday’s rally saw more than profit taking.
A strong bullish candlestick significantly outperformed Thursday’s decline and much of Wednesday, recording its biggest one-day gain since April 4.
Also note that Friday’s rally came from an oversold RSI on the daily timeframe, wiping out just over half of the gains from the March lows.
A rally in silver could bring the price back to the key cyclical level of $24 relatively quickly.
Silver is often the canary in gold mines. A similar reversal is expected for gold if the former finds buyer support later this week.
However, silver could see a deeper correction into its current 200-day average of $22.
