Gold’s “treacherous” route: first rallying past 5200, then crashing to 3800—senior technical analysts warn of a trap that lures longs

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After recording the largest monthly decline since the early 1980s, gold started the new month and new quarter strongly, with prices once again surpassing $4,700 per ounce. However, a market analyst believes this unprecedented correction is not yet over.

In an interview with Kitco News, senior technical analyst and founder of ElliottWaveTrader, Avi Gilburt, stated that he sees two very different technical paths that could ultimately push gold prices below $4,000, down to around $3,800 per ounce.

Gilburt’s target implies a further decline of about 20% from current levels. Spot gold is currently trading at $4,692 per ounce, having just been affected by Trump’s speech on Iran war.

Gilburt said he is closely watching the current price action because the first path involves gold encountering resistance near current levels and then moving lower. But he added that the second path is more dangerous.

He stated that he will watch whether gold breaks through the resistance level at $4,800 per ounce—if it does, prices could rise to $5,200 before triggering the expected downward trend.

“This path is more treacherous or deceptive because higher prices will make everyone believe the correction is over, but in reality, the correction has just begun,” he said.

Regarding silver, his outlook is similar to gold. As long as silver remains below its recent high set in March, he sees downside risk toward $53.50 per ounce.

However, Gilburt also emphasized the difference between traders and investors. He said that if his target levels can become support levels, that could present a buying opportunity, though the subsequent rebound will be key to judging whether the broader trend remains bullish or shifts into a long-term bear market.

Gilburt also pointed out that the current market structure resembles the peak period of precious metals in 2011, suggesting that the price movement after this correction will determine whether history repeats itself.

For long-term investors, he believes silver below $60 offers significant value, although he does not rule out further corrections down to $40.

“For silver, over the long term—next 10 years—any price below $60 will be an excellent buying opportunity,” he said.

Beyond gold and silver, Gilburt also highlighted opportunities in mining stocks. He believes that during the next rebound phase, mining stocks may outperform base metals. He noted that some mining stocks have already bottomed out, while others are still in correction patterns, creating selective opportunities across the sector.

“A considerable number of mining stocks could outperform silver and gold,” he said, adding that based on individual chart patterns, opportunities exist among producers and developers.

Looking at broader commodities, Gilburt stated that oil prices could rise further in the short term, but he expects a significant decline later this year, with oil potentially falling below $50.

Overall, he said his outlook remains driven by technical structures rather than macroeconomic narratives, with key turning points for gold, silver, stocks, and commodities expected within the next few months.