Precious Metals Decline: Gold and Silver Under Pressure in Thursday Trading

The Silver Market Backlash

During the US trading session on Thursday, January 8, the precious metals sector experienced significant downward movements. Silver suffered particularly sharp losses, driven by short-term speculative profit-taking and the closing of weakened long positions. This scenario created a bearish momentum on silver charts, fueling panic among those still betting on gains for both metals.

March silver futures contracts saw notable fluctuations, trading at $73.83 per ounce, down $3.783. Meanwhile, February gold futures were quoted at $4,431.7 per ounce, decreasing by $30.8 compared to previous sessions.

Sustainability of Bullish Movements: The Role of Positive News

A well-established principle in financial markets states that a mature bull cycle requires an uninterrupted flow of positive catalysts to sustain itself. Currently, precious metals seem to lack such fundamental supports, complicating the outlook for investors betting on further appreciation. This situation is compounded by technical pressures from adverse chart configurations.

Rebalancing of Commodity Indices: A Key Event

Market participants are preparing for the annual rebalancing of commodity indices, an event that could generate significant selling flows in the coming days. Citigroup estimates that rebalancing could involve the disposal of approximately $6.8 billion in silver contracts, accompanied by comparable outflows from the gold market. The cause of this selling pressure lies in the substantial increase in the weighting assigned to precious metals in benchmark commodity indices.

Technical Analysis of Silver and Short-Term Outlook

From a technical perspective, March silver contracts raise significant concerns. The weekly movement has outlined a double top inverted pattern on daily charts, suggesting vulnerability to downside in upcoming developments. Bullish traders aim for a close above $82.67 per ounce, the contract’s all-time high. Conversely, bears are targeting a price below $69.225 per ounce, last week’s low.

Key technical resistance levels are at $75.00 and $76.00 per ounce, while key supports are at $74.00 and $72.50 per ounce. For February gold futures, the next bullish target is a breakout above the all-time high of $4,584.00 per ounce, while the bearish objective for bears remains a break below $4,284.30 per ounce. Immediate resistances are at $4,475.20 and $4,500.00 per ounce, with supports at $4,400.00 and $4,354.60 per ounce.

US Labor Market: Contrasting Signals

Unemployment data present a complex context. According to consulting firm Challenger, Gray & Christmas, layoffs in the US in December reached the lowest level since July 2024, with 35,553 announced dismissals compared to 71,321 in November, an 8% year-over-year decline. However, the annual figure for 2025 tells a different story: employers reported a total of 1,206,374 layoffs, up 58% compared to 2024 and the highest level since 2020. The government sector led this trend with 308,167 dismissals mainly at the federal level, while the private sector’s tech industry recorded 154,445 layoffs, the highest among all sectors.

Regulatory and Trade Policy Issues

The US Supreme Court may soon rule on the constitutionality of tariffs imposed by the Trump administration. The central issue is whether the president can invoke the International Emergency Economic Powers Act of 1977, a rarely used emergency law, to justify large-scale “reciprocal” tariffs and specific trade measures on China, Canada, and Mexico. Lower courts have already ruled that this legal recourse exceeds presidential authority. A ruling declaring these tariffs unlawful could lead to the abolition of most tariffs imposed during Trump’s second term and require the government to reimburse billions of dollars.

However, the government has alternative avenues to continue its tariff policy. The Constitution grants Congress the power to impose tariffs, but legislators have delegated significant portions of this authority to the executive through various laws. These alternative laws give Trump at least five different options to apply tariffs, though they generally involve stricter procedural constraints and more rigorous requirements, limiting the ability for immediate and arbitrary impositions.

Expansion of Defense Spending

President Trump announced plans to increase US annual defense spending by $500 billion, bringing it to a total of $1.5 trillion. He also signed an executive order requiring major defense contractors to suspend share buybacks and dividend distributions, while imposing a maximum executive compensation of $5 million annually until these companies significantly increase investments in plant construction and R&D activities. This policy has led to declines in the stock prices of companies such as Raytheon Technologies, Northrop Grumman, Lockheed Martin, and General Dynamics.

US Strategy on Venezuelan Oil: Market Implications

The Trump administration outlined a strategy to acquire control of up to 50 million barrels of Venezuelan oil, representing one of the most significant supply shifts in recent years. The president announced this policy via social media Tuesday evening, with Energy Secretary Chris Wirth providing further details on Wednesday. This strategy involves direct federal government participation in the international oil market and could restore Venezuelan crude flows to US refineries, interrupted for years by trade sanctions.

Oil traders and US refiners are already rapidly repositioning their strategies to secure Venezuelan crude supplies. The return of this oil to US buyers could be one of the most significant energy realignments in decades. The announcement has already caused a collapse in Canadian oil prices and exerted pressure on benchmark crude futures. Venezuela holds the world’s largest oil reserves, but decades of underfunding, trade embargoes, and economic isolation have reduced production to about one million barrels per day. Although major US oil companies expect meetings at the White House in the coming days, Bloomberg analysts note that without explicit political and legal guarantees, many drilling companies may remain cautious before re-entering or penetrating the Venezuelan market.

Market Context: Key Indicators and Outlook

The dollar index experienced a slight appreciation today. Oil prices showed upward momentum, trading around $57.00 per barrel. The yield on 10-year US Treasuries stands at 4.16%.