Technical correction in precious metals markets: gold and silver decline after historic record

Monday trading sessions highlighted an interesting dynamic in the gold and silver futures markets. After reaching new all-time highs, both precious metals experienced a particularly intense profit-taking phase during the afternoon US session, with traders deciding to lock in their accumulated gains.

Market Data and Achieved Highs

The numbers clearly indicate the observed volatility. During the night, the March silver futures contract on the COMEX peaked at $82.67 per ounce, while the February gold futures price reached $4,584.00 per ounce the previous Friday. However, during today’s session, the gold contract recorded a loss of $203.4, closing at $4,349.30 per ounce. Simultaneously, silver fell by $6.87, settling at $71.895 per ounce.

Nature of the Correction and Technical Implications

From a technical analysis perspective, today’s movement represents a healthy correction within the bullish trend governing both markets. Although there was a short-term technical damage, the situation does not appear concerning at this stage. However, the evolution over the next two trading days will be decisive: if significant selling pressures continue on December 31 or January 1, a more serious technical deterioration could occur, signaling a possible short-term top. Conversely, if gold and silver prices rebound strongly, today’s low could solidify as the new “correction low” within the current bullish trend.

Technical Levels and Price Scenarios

Regarding February gold futures, bullish traders aim to push through the crucial resistance at the all-time high of $4,584.00 per ounce. In the short term, primary resistance is set at $4,400.00 per ounce, followed by secondary resistance at $4,433.00. The first support level coincides with the day’s low at $4,316.00, with further technical support at $4,300.00 per ounce.

On the chart of March silver futures, today’s pattern outlined a significant bearish setup, with buyers exhausting momentum at the highs and prices closing near daily lows. The current primary resistance is at $72.50 per ounce, with additional resistance at $73.00. The main support is at $70.00, while secondary support is at $69.00 per ounce. The goal for bearish traders is to push the price below the key threshold of $67.50 per ounce.

Related Markets Context

In the broader Tuesday context, the dollar index registered a slight increase, while crude oil prices showed strength, trading around $59.25 per barrel. The yield on US 10-year Treasuries was at 4.118%.

Concluding Considerations on Future Direction

The direction that gold and silver prices will take in the coming weeks will critically depend on the performance over the next two trading days. Today’s correction, while significant in absolute terms, has not compromised the underlying bullish structure but has created a very important decision zone for the market. Investors will need to closely monitor the behavior of gold and silver prices in the upcoming sessions to understand whether we are facing a simple pause within a durable upward trend or the beginning of a deeper corrective phase.