Silver faces technical pressure as gold price consolidates at record levels

During the U.S. session on Wednesday, January 7, both gold and silver experienced significant corrections driven by profit-taking from speculative traders. Gold futures for February traded at $4,467.2 per ounce, down $28.9, while March silver contracts retreated to $78.22 per ounce, falling $2.819 during the session. The technical resistance at all-time highs has generated caution among buyers midweek.

Concerning Technical Formation in Silver

The daily chart analysis of Comex silver futures reveals a potential bearish setup: a double top pattern is forming, indicating a possible trend reversal. This movement has caused concern among bullish investors, especially considering the technical implications of such a formation.

According to traditional technical analysis principles, confirmation of this pattern would occur if the silver price drops below the intermediate valley at $69.255. Analysts warn that numerous stop-loss orders are positioned near this critical level, which could amplify declines if this key support is broken.

The evolution of silver in the coming days will be decisive: as long as this quote remains at risk of further decline, gold also faces short-term pressure. Immediate resistances for silver are located at $79.00 and $80.00 per ounce, while a break below $75.00 per ounce would open the door to more pronounced drops.

Institutional Demand Supports Gold at All-Time Highs

Despite recent volatility, gold continues to be supported by solid structural factors. The People’s Bank of China has increased its gold reserves for 14 consecutive months, adding 30,000 ounces last month. Since November 2024, the institution has accumulated approximately 1.35 million ounces — equivalent to 42 tons — in its current buying cycle.

This sustained buying behavior by monetary authorities reflects persistent official demand even at record-high prices. Combined with geopolitical concerns and investors’ preference for safe-haven assets over sovereign bonds, gold achieved its best annual performance since 1979.

Key Technical Levels to Watch

For February gold futures, the upside target is to close convincingly above $4,584.00 per ounce (contract’s all-time high); on the downside, the critical level is at $4,200.00. Nearby resistances are at $4,512.40 and $4,550.00 per ounce, while immediate supports are at $4,432.90 and $4,400.00.

Regarding silver, bulls aim to surpass the historic resistance at $82.67 per ounce, while bears target breaking below the previous weekly low at $69.225. The next secondary support is at $75.70, followed by $75.00 per ounce.

External Market Context

The moderate strengthening of the U.S. dollar index acted as a counterbalance for precious metals. Oil retreated to trade around $56.50 per barrel, while the yield on the 10-year U.S. Treasury bond was approximately 4.15%, affecting demand for alternative safe-haven assets.