## Silver in a Technical Trap: The Chart Sets a New Scenario for Bulls and Bears

The US trading session on January 7th brought significant changes to the precious metals market. Futures contracts for gold delivery in February fell to $4467.2 per ounce (loss of $28.9), while March silver papers declined to $78.22 per ounce (minus $2.819). Most analysts point to short-term market participants taking profits, but key technical barriers at record-high price levels also played a crucial role, forcing bullish investors to adopt a wait-and-see stance midweek.

## Double Top Silver: A Decisive Moment for Confirming a Bearish Pattern

Analysis of the daily chart of March silver contracts on COMEX at the New York Mercantile Exchange indicates a potential formation of a double top bearish pattern. This week—especially today’s sharp price movement—could be a key element of this pattern. According to classic technical analysis principles, this formation is finally confirmed when the price breaks below the trough located between the two peaks. For silver, this means breaking below the March contract prices of $69.255 per ounce. At this price level, a significant number of stop-loss protective orders may be concentrated, potentially accelerating declines. Silver price behavior in the remaining days of the week will be crucial for confirming or rejecting this bearish scenario.

## China’s Central Bank Supports Gold Prices: 14 Months of Growth in Purchases

Regardless of short-term fluctuations, the fundamental outlook for gold remains solid. The People’s Bank of China has been steadily increasing its gold reserves for fourteen consecutive months, demonstrating consistent official demand for the metal amid reaching historic price levels. According to data published Wednesday, China’s central bank added 30,000 ounces of gold in the last month. Since the start of this purchase cycle in November 2024, the institution has acquired approximately 1.35 million ounces (or 42 tons), a clear signal of interest in gold as a reserve diversification tool.

## Gold in an Uptrend: Year at Highest Levels Since 1979

Despite temporary dips on the chart, gold shows remarkable strength on an annual basis. After a spectacular rise to record levels last fall, the metal posted its best yearly performance in forty-five years. This year’s data proves that central bank purchases, geopolitical concerns, and capital reallocation transactions (investors are massively shifting from government bonds and money markets to more alternative value storage instruments) remain key factors supporting price appreciation.

## Technical Scenarios: Which Direction Will the Gold and Silver Charts Take?

From a technical perspective, for February gold contracts, the next target for buyers is to close above $4584.00 per ounce, a significant resistance barrier at a historic level. Sellers aim to break below strong support at $4200.00 per ounce. This week, initial resistance is at yesterday’s high of $4512.40 per ounce, then at $4550.00 per ounce; support levels for the upcoming sessions are today’s low of $4432.90 per ounce and $4400.00 per ounce.

For March silver contracts, current chart dynamics increase the chances of confirming a bearish scenario. Bullish investors must primarily close above the historic resistance of $82.67 per ounce, while bears will aim to close below last week’s low of $69.225 per ounce. The nearest resistance levels are $79.00 and $80.00 per ounce; supports are at $75.70 and $75.00 per ounce.

## Macro Environment Supports Precious Metals

The US dollar index showed slight strengthening, oil prices fell to around $56.50 per barrel, and the yield on 10-year US Treasury bonds is currently about 4.15%. These macroeconomic conditions and the sustained demand from central banks for gold remain the main driving forces behind precious metals prices at this stage of the market cycle.