The surge from the June 28 low of $26.11 is considered as a part of a three-wave rebound that started at the Sept. 26, 2011 low of $26.04.
This rebound has adopted a flat wave pattern, consisting of three waves roughly equal in length.
The metal is riding on an upward wave c, the third wave of the wave B, and may travel to $37.53, its 100 percent Fibonacci projection level, based on the length of the wave that started at $26.04 and ended at the Feb. 29 high of $37.46.
However, this target could only be confirmed when silver goes above the Sept. 21 high of $35.15, as the wave c may also be shorter than the wave a, to peak around its 76.4 percent projection level at $34.83 as well.
Silver will then have a great difficulty in breaking the resistance at $37.53, as this barrier is strengthened by another one at $37.78, the 50 percent Fibonacci retracement on the fall from $49.51 to $26.04.
Only a break above $37.78 could trigger a moderate gain to $40.54, the 61.8 percent level.
But even a gain to $40.54 won't guarantee a resumption of silver's long-term uptrend towards $49.51, as the wave pattern indicates the downward wave C will eventually take over to drive the price towards $26.11.
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