Silver Forecast: Silver analysis indicates a risk of breaking through a key trend line.
2026-01-08 23:41:47
On Thursday (January 8), spot silver fell sharply during the US session, breaking below the key 50% retracement level of $77.05. This downward momentum has placed the market at a test of the upward trendline at $74.03. This indicator has been providing support for the uptrend since the major low of $48.64 on November 21. While a technical bounce may occur on the first test of the trendline, a break below it will bring the previous swing low of $70.07 back into focus.
A secondary lower high is formed after the reversal pattern.
Following Wednesday's minor reversal high and today's continued decline, the market formed a secondary high at $82.77. A break above $83.94 would signal a resumption of the uptrend; while according to the daily oscillator chart, a break below $70.07 would turn the primary trend down.
A break below $70.07 would not only reverse the trend but could also push prices down further to the $64.79-$60.25 mid-term correction range. This range, together with the 50-day moving average at $59.60, forms a potential area of dense support.
CME's increase in margin requirements and index rebalancing limited gains.
The long-term fundamentals remain intact—supply shortages and strong demand persist—but two external factors have dampened calls for a near-term rise to $100. The first is the Chicago Mercantile Exchange's (CME) two margin calls, which contributed to the record high of $83.94. The second is market expectations of a major rebalancing of the two major commodity indices, which propelled Wednesday's high of $82.77.
$6.8 billion in silver futures face liquidation
According to Citigroup, traders of funds tracking the Bloomberg Commodity Index and the S&P GSCI Commodity Index are preparing to sell silver contracts equivalent to about 12% of the open interest on the New York Mercantile Exchange (Comex), worth about $6.8 billion.
Bearish pressure emerges after months of bullish sentiment.
The secondary high of $82.77 is the first sign of significant bearish pressure in the market in months. We would not declare a "bear market" at this point, but the emergence of new short positions suggests that someone is betting that this is more than just a normal pullback.
Outlook: Trendline test imminent, exit strategy crucial.
(Spot silver daily chart source: EasyTrade)
Looking ahead, a break below the $74.03 trendline should be a warning to any stubborn bulls: further declines are imminent. I've repeatedly emphasized the importance of having an exit strategy, otherwise the market will tell you when to exit, and usually at a very expensive price. I believe now is that moment. If you wait too long to take profits, or even just reduce your position, you may eventually be forced to sell at the support level I've mentioned.
The market direction before today's close may depend on traders' reaction to the $74.03 trendline.
A secondary lower high is formed after the reversal pattern.
Following Wednesday's minor reversal high and today's continued decline, the market formed a secondary high at $82.77. A break above $83.94 would signal a resumption of the uptrend; while according to the daily oscillator chart, a break below $70.07 would turn the primary trend down.
A break below $70.07 would not only reverse the trend but could also push prices down further to the $64.79-$60.25 mid-term correction range. This range, together with the 50-day moving average at $59.60, forms a potential area of dense support.
CME's increase in margin requirements and index rebalancing limited gains.
The long-term fundamentals remain intact—supply shortages and strong demand persist—but two external factors have dampened calls for a near-term rise to $100. The first is the Chicago Mercantile Exchange's (CME) two margin calls, which contributed to the record high of $83.94. The second is market expectations of a major rebalancing of the two major commodity indices, which propelled Wednesday's high of $82.77.
$6.8 billion in silver futures face liquidation
According to Citigroup, traders of funds tracking the Bloomberg Commodity Index and the S&P GSCI Commodity Index are preparing to sell silver contracts equivalent to about 12% of the open interest on the New York Mercantile Exchange (Comex), worth about $6.8 billion.
Bearish pressure emerges after months of bullish sentiment.
The secondary high of $82.77 is the first sign of significant bearish pressure in the market in months. We would not declare a "bear market" at this point, but the emergence of new short positions suggests that someone is betting that this is more than just a normal pullback.
Outlook: Trendline test imminent, exit strategy crucial.
(Spot silver daily chart source: EasyTrade)
Looking ahead, a break below the $74.03 trendline should be a warning to any stubborn bulls: further declines are imminent. I've repeatedly emphasized the importance of having an exit strategy, otherwise the market will tell you when to exit, and usually at a very expensive price. I believe now is that moment. If you wait too long to take profits, or even just reduce your position, you may eventually be forced to sell at the support level I've mentioned.
The market direction before today's close may depend on traders' reaction to the $74.03 trendline.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
