The "treacherous" path of gold: first surging past 5200 then plummeting to 3800, senior technical analysts warn of a trap of false signals

Why does Avi Gilburt say that the upward path of gold is more deceptive?

Source: Jin10 Data

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 that this unprecedented correction is not 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 hit 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 said he will watch whether gold breaks through the $4,800 resistance level—if it does, prices could rise to $5,200 before triggering the expected downward trend.

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

His outlook for silver 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 in determining whether the broader trend remains bullish or shifts into a long-term bear market.

Gilburt also pointed out that the current market structure resembles that of the 2011 peak in precious metals, 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 the possibility of further correction down to $40.

“For silver, in the long run—over the 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 could outperform base metals. He noted that some mining stocks have already bottomed, 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 both producers and developers.

Looking at broader commodities, Gilburt said 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 stated that his outlook remains driven by technical structures rather than macroeconomic narratives, and key turning points for gold, silver, stocks, and commodities are expected to occur within the next few months.