Rallies in gold and silver markets: the technical pattern of silver draws attention

On Wednesday, January 7th, during the US afternoon session, both gold and silver experienced significant declines. The February futures on gold closed at $4,467.2 per ounce, down $28.9, while the March delivery silver contract settled at $78.22 per ounce, decreasing by $2.819. This bearish dynamic was mainly driven by profit-taking operations by speculative traders, while strong technical barriers near historical highs pushed bullish traders toward a more cautious stance during midweek.

Technical Analysis: The Double Top Pattern Worries Bulls

Gold prices today show dynamics closely correlated with silver movements. On the daily chart of COMEX (March expiration) silver futures, the emerging configuration over the past days represents a potential inverted double top bearish pattern. The evolution of silver prices later this week will be crucial to confirm or disprove this technical formation.

According to traditional analysis principles, confirmation of a double top bearish pattern occurs when the price falls below the intermediate low between the two peaks. For silver, this critical threshold is $69.255 per ounce. A breakdown below this level could trigger a cascade of pre-set stop-loss orders, amplifying downward pressure.

Key Technical Levels for Gold and Silver

Gold (February):

• Main Resistance: contractual high of $4,584.00 per ounce
• Intermediate Resistances: $4,512.40 (yesterday’s high) and $4,550.00 per ounce
• Immediate Support: today’s low of $4,432.90 per ounce
• Secondary Support: $4,400.00 per ounce

Silver (March):

• Main Resistance: all-time high of $82.67 per ounce
• Intermediate Resistances: $79.00 and $80.00 per ounce
• Main Support: last week’s low of $69.225 per ounce
• Secondary Supports: $75.70 and $75.00 per ounce

Support from Official Gold Demand

Despite recent volatility following the autumn peak, gold’s fundamentals remain strong. The Chinese People’s Bank has maintained its expansionary buying cycle, increasing gold reserves for the fourteenth consecutive month. Last month, it purchased 30,000 ounces of gold, bringing total purchases since the start of the expansion phase (November 2024) to approximately 1.35 million ounces, equivalent to 42 tons.

This central bank stance, combined with geopolitical concerns and capital flows into safe-haven assets (with transfers from sovereign bonds and monetary instruments), has enabled gold to record its best annual performance since 1979.

Global Market Context

The macro environment of external markets remains complex: the US dollar index has shown slight strengthening, oil prices have declined, settling around $56.50 per barrel, while US 10-year Treasury yields remain around 4.15%.

These factors will continue to influence gold price trajectories today and in the coming days, in a landscape where technical trading intertwines with the long-term considerations of institutional investors.