Gold and silver experience a technical correction after breaking historical highs

LiquidationAlert · 2026-01-20T17:11:26+00:00

On December 29, precious metal markets experienced a significant downturn, with gold and silver futures dropping sharply after previous highs. This correction could signal either a temporary pullback or a more serious bearish trend, depending on price movements in the following days. Key resistance and support levels are outlined for both gold and silver futures, indicating a critical period for market direction ahead.

LiquidationAlert

2026-01-20 17:11:26

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Monday, December 29th’s session marked an important inflection point in the precious metals markets. After gold futures reached $4,584 per ounce and silver touched $82.67 per ounce in the previous session, both instruments experienced a significant pullback during the US session afternoon, recording some of the largest losses in years.

Magnitude of the plunge and market dynamics

The February gold futures contract fell by $203.4, closing at $4,349.3 per ounce. Meanwhile, March silver futures retreated by $6.87 to $71.895 per ounce. The movement was primarily driven by massive profit-taking by speculative traders and the closing of weak long positions that prevailed during the previous rally.

External markets showed mixed dynamics: the dollar index experienced a slight appreciation, crude oil prices remain around $59.25 per barrel, while the US 10-year bond yield stands at 4.118%.

Technical outlook: correction or trend change?

From a short-term perspective, Monday’s pullback represents a correction within the broader bullish trend that still maintains its structural integrity. Although technical damage is moderate at this moment, the price action over the next two days will be decisive. If additional selling pressures continue, a more severe bearish pattern could be established. Conversely, if gold and silver futures manage to rebound strongly, today’s low could become a new support level within the current upward movement.

Key technical levels for futures

Gold futures (February):

Resistances: $4,400 (immediate), $4,433, all-time high at $4,584
Supports: $4,316 (day’s low), $4,300, $4,200 (critical support)

Silver futures (March): The daily chart has formed a clear bullish exhaustion pattern, closing near the day’s lows after a sharp retreat from all-time highs. This suggests a possible short-term bearish reversal.

Resistances: $72.50, $73.00, all-time high at $82.67
Supports: $70.00, $69.00, critical support at $67.50

The time factor: next 48 hours crucial

Traders should closely monitor Tuesday and Wednesday’s openings. A rejection at resistance levels could confirm that prices have reached a temporary top, while a solid close above key levels would reinforce the continuation of the long-term bullish movement.

The performance of gold futures over the next two days will be crucial in defining the price direction in the coming weeks.

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