Silver prices have now corrected 50% of their gains from the February 29 low of $14.6 and as the short-term trend defining level for most traders is the February 29 low of $14.6, or in my case the March 3 low of $14.87, the risk/reward ratio and trend is now favoring bullish positions.

In other words, it would not surprise me if silver prices try to carve out a low at current levels over the next few days. The exact range I am looking at is the $15.09 to $15.36 range, which are Fibonacci retracement levels. Please see the chart below.

Following a potential failure to bounce at current levels and a breach to the March 3 low of $14.87, there is a heightened risk that price may turn bearish and therefore trade lower. If this occurs, I would expect bullish traders to head for the exit.

U.S. Wholesale Inventories

In the afternoon, U.S. Wholesale inventories are expected to decline by -0.2% MoM and may move silver.

An interesting statistic published in the same report is that of Merchant Wholesale Sales, which measures sales and its YoY change to give us a hint of where the economy may be heading. The last reading showed sales contracting by 4.5% YoY and an even lower reading today may boost silver, as it suggests that the economy may be slowing further. A less severe contraction than 4.5% YoY may suggest an outcome to the opposite effect.

Silver Prices | FXCM: XAG/USD