Gold and silver prices decline, with silver technical patterns causing panic among bulls

Around midday on January 7th during the US trading session, gold and silver prices fell mainly due to short-term futures traders taking profits. The strong technical resistance just above the record high levels also caused gold and silver bulls to remain cautious during the midweek period. The March delivery gold futures are reported at 4467.2, down 28.9; the March delivery silver futures are at 78.22, down 2.819.

From a technical perspective, the next upward target for February gold futures is a closing price break above the 4584 record high, a strong resistance level; the recent downward target for shorts is to push the futures price below the 4200 strong technical support level. The first resistance is at the overnight high of 4512.4, followed by 4550; the first support is at today’s low of 4432.9, followed by 4400.
For March silver futures, today’s price movement increases the likelihood of a bearish double top reversal pattern on the daily chart. The next upward target for bulls is a closing price break above the 82.67 record high, a strong technical resistance level; the next downward target for bears is a closing price below last week’s low of 69.225, a strong support level. The first resistance is at 79, followed by 80; the next support levels are at 75.7, followed by 75. Note: The gold market mainly operates through two pricing mechanisms. The first is the spot market, which reports the current purchase and delivery prices; the second is the futures market, which determines the price for delivery on a future date. Due to year-end position adjustments and market liquidity, the most actively traded gold futures contract on the Chicago Mercantile Exchange (CME) is currently the December contract.