Silver at risk: double top pattern raises alarms among investors as silver ounce price drops

The U.S. session on Wednesday, January 7th, brought bitter surprises for precious metals bulls. During midday, both gold and silver experienced significant declines driven by short-term traders taking profits at extremely strong technical resistances. The February gold futures contract closed at $4,467.20 per ounce, down $28.90; while the March silver contract retreated to $78.22 per ounce, decreasing by $2.819.

Technical Alert: Is the double top in silver consolidating?

What keeps speculators on edge is the formation beginning to take shape in silver. The daily chart of March silver futures on Comex shows clear signs of a bearish double top pattern—one of the most concerning setups for the bulls. If the silver price per ounce falls below the intermediate valley (approximately $69.255), analysts would consider this reversal confirmed.

The critical level is fundamental: there is evidence of pre-positioned stop-loss orders just below this support. Today’s movements could be just the prelude to a deeper correction. Traders are closely monitoring every fluctuation—any daily close below $69.225 could trigger a selling cascade.

Market dynamics: gold follows silver

Silver’s volatility historically anticipates moves in gold. After reaching all-time highs a few weeks ago, the precious metals complex faces consolidation. For the bulls to regain control, gold must break through the critical resistance of $4,584.00 per ounce, while silver needs to close above $82.67 per ounce.

In the macro context, the U.S. dollar strengthened marginally, pressuring metals. Oil trades around $56.50 per barrel, and the 10-year Treasury yield is near 4.15%.

Central banks sustain demand: China added 1.35 million ounces

Counteracting the downside pressures, the People’s Bank of China continues its aggressive accumulation. According to figures from Wednesday, it added 30,000 ounces compared to the previous month, extending its buying cycle to 14 consecutive months. Since November 2024, Chinese monetary authorities have accumulated approximately 1.35 million ounces of gold (42 tons).

This official demand, combined with geopolitical concerns and investors migrating from sovereign bonds to safe-haven assets, allowed gold to record its best year since 1979—despite recent volatility.

Key technical levels to watch

Gold February:

• Immediate resistance: $4,512.40, followed by $4,550.00
• Critical support: $4,432.90, then $4,400.00
• Bullish target: break above $4,584.00
• Bearish target: fall below $4,200.00

Silver March:

• Resistance: $79.00, then $80.00
• Support: $75.70, then $75.00
• Bullish target: surpass $82.67
• Bearish target: break below $69.225

Today’s price action significantly increases the probability of the bearish double top. The next session will be decisive in confirming or dismissing this pessimistic scenario.