Silver prices (XAG/USD) are currently consolidating in the $31.60s after reaching a new eleven-year high on Monday. This pause presents a technical crossroads, hinting at either a continuation of the uptrend or a potential correction.

Bullish Potential:

• Short-Term Uptrend: The overall trend on the short-term chart remains bullish, suggesting a potential extension of the uptrend.
• Bull Flag Pattern: A Bull Flag continuation pattern might be forming on the chart. A confirmed breakout above the consolidation area (shaded rectangle) would activate this pattern and push prices towards $33.83-$35.34, a key resistance level.

Bearish Signs:

• Tweezer Top Formation: The formation of a potential Tweezer Top candlestick pattern (two consecutive days with long upper wicks at similar highs) could indicate a short-term bearish reversal if confirmed by Tuesday’s closing price.

Overbought RSI:

• The Relative Strength Index (RSI) is in overbought territory, suggesting caution for adding to long positions. A decline in the RSI out of the overbought zone could signal a deeper correction.

Support Levels:

• Initial support for a correction might be found at $30.00, a former resistance level.

The direction of silver prices remains uncertain. While the uptrend is still intact in the short and medium term, the technical indicators suggest a possible correction before the rally resumes. A confirmed break below $30.00 with strong bearish candlesticks would cast serious doubt on the uptrend.