Peter Smith
Silver traders might want to prepare for more downside before things turn around. According to fresh Elliott Wave analysis, the metal's recent price action points to an unfinished correction that could still have another leg or two left.
Elliott Wave Pattern Suggests More Downside
The latest chart from Elliott Forecast shows that XAGUSD has already dropped through five swings and may now be evolving into a seven-swing corrective pattern—a sign that the weakness isn't over just yet.
The chart reveals Silver trending lower after peaking near $55.68. From there, the price unfolded in a clean five-wave decline—a classic Elliott Wave move that's often followed by a more complex correction. Right now, the pattern looks like it could be forming a W–X–Y–X–Z structure, suggesting at least one more downswing before a real bottom takes shape.
Currently trading around $46.90, Silver sits below the key $49.46 invalidation level marked on the chart. The notation "Turning Down" signals that sellers are still in control as the downward cycle continues. Meanwhile, a Fibonacci extension near $46.45 acts as the likely target for the final wave (v), where a short-term bounce or reversal might kick in. Interestingly, the chart also includes a note saying "We Do Not Recommend Selling"—a hint that while the bearish trend is intact, chasing it lower from here carries real risk as momentum may already be running out of steam.
What happens next hinges on a few key levels:
- $49.46 invalidation zone — a break above this would kill the bearish setup and suggest the correction is already done
- $46.45 support area — the 1.618 Fibonacci extension and most probable spot for the pullback to wrap up
- Wave (v) completion — the chart suggests Silver is forming the final leg down, after which a rebound could follow
That said, this near-term weakness doesn't necessarily erase Silver's longer-term bullish case. The pullback is happening against a backdrop of a stronger dollar and softer risk appetite—both typical headwinds for precious metals. But structurally, Elliott Wave analysts often view seven-swing corrections as future buying opportunities once the final swing plays out. And with industrial demand for Silver surging across solar, EVs, and green tech, the bigger picture still looks constructive. For now though, patience may be the play as the correction runs its course.
Peter Smith
