Photo by Scottsdale Mint on Unsplash
 

Silver broke higher last week pretty sharply and strongly, but gold is not following to the upside that much. However, because of the falling gold–silver ratio, silver is the best performer at this stage, so obviously, we are putting an updated wave count in action here, which could be a diagonal pattern because the first three legs up from the October lows could represent wave 1 of this five-wave move that can unfold into a wedge formation. So it could still grind higher, and it looks like there could be room for 60 dollars. On dips, support can be found at the previous highs near 54.50, while the invalidation level is at 51.85, because if we think we are in a diagonal then wave 4 should not be longer than wave 2 in price.
 

XAGUSD(silver) 4H Chart
 

On a higher degree daily chart, we see it trading in a five-wave impulse within wave III, so more gains can be seen within wave 5 of III, but be aware of a bigger wave IV retracement, possibly sometime in 2026.
 

XAGUSD(silver) Daily Chart
 

The reason why silver could stay in the uptrend is weakening of the USDollar Index - DXY. DXY made higher highs and higher swing lows from September when the Fed cut rates, with stock markets beeing under pressure since expectations for further cuts have decreased. That's why silver was in consolidation. But this has changed recently, and what’s really important now is that despite this recovery on DXY from September lows, we still see an overlapping wave structure, so it can easily be a five-wave movement that can even represent a diagonal in wave C, meaning a reversal pattern that could send prices lower soon after a completion of the higher-degree wave four. Or it, it can be a leading diagonal, but even in that case we would expect a three-leg pullback that seems underway right now, which can push the price of silver higher.
 

DXY 4H Chart 
 

For a detailed view and more analysis like this, you may want to join our live webinar today on Monday December 01 @ 15.00CET: DIRECT LINK

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