Silver in negative territory: the technical pattern of silver's value today raises caution among buyers

Precious Markets Retreat in the US Session

According to market data from January 7th, during the US afternoon trading session, both gold and silver experienced significant declines. The February futures contract for gold settled at $4,467.2 per ounce, down $28.9. Meanwhile, silver’s value today reported an even sharper drop, with March futures quoted at $78.22 per ounce, decreasing by $2.819. Short-term strategy traders realized profits, while long-position holders remain on hold, hindered by strong technical pressures that persist at historic peaks.

Concerning Technical Outlook for Silver: Double Bottom Bearish Pattern

The daily COMEX chart analysis reveals a critical technical element. The silver price configuration in the New York markets is tracing what analysts identify as an inverted double top pattern. The development over the coming days will be decisive in confirming or denying this bearish formation.

According to classical technical analysis principles, the pattern would be validated if prices fall below the intermediate low between the two peaks. For silver, this would mean a drop below $69.255 per ounce. At these price levels, numerous pre-set stop-loss orders could trigger, further accelerating the decline.

Regarding the technical targets for February gold futures, buyers aim for a stable close above the historic resistance of $4,584.00 per ounce. Conversely, sellers aim to break through the technical support at $4,200.00 per ounce. In the short term, immediate resistance is at yesterday’s high of $4,512.40 per ounce, while the first support is at today’s low of $4,432.90 per ounce.

Official Gold Demand: Chinese People’s Bank Accelerates Purchases

In a broader context, a countertrend phenomenon emerges against the market weakness. The Chinese People’s Bank has recorded its fourteenth consecutive increase in gold reserves, acquiring 30,000 ounces in the previous month. Since the launch of the current buying cycle in November 2024, the Chinese monetary authority has accumulated approximately 1.35 million ounces of gold, equivalent to 42 tons of yellow metal.

This systematic accumulation trend by monetary authorities reflects a persistent search for value preservation tools amid a tense geopolitical environment. With gold posting its best annual performance since 1979, official interest continues to underpin overall demand.

Related Market Dynamics

The US dollar index has shown slight strengthening, while crude oil has come under downward pressure, trading around $56.50 per barrel. The yield on 10-year US Treasuries remains around 4.15%, maintaining pressure on alternative assets.

Technical Projections and Critical Levels

Regarding March silver, today’s development has increased the likelihood of the aforementioned bearish pattern forming. The next upside target remains at the all-time high of $82.67 per ounce, while the downside target points to last week’s technical support at $69.225 per ounce. Immediate resistance is at $79.00 per ounce, with subsequent support identified at $75.70 per ounce.

For gold, today’s price movement keeps volatility within manageable parameters, but the confluence of adverse technical factors and profit-taking strategies continue to act as limiting factors for buyers.