A seasoned technical expert has issued a startling warning: After the largest monthly drop in history, the gold correction is far from over and could see a further 20% decline.
2026-04-02 10:00:25
After experiencing its worst monthly drop since the early 1980s, the gold market showed strong momentum at the start of the new month and second quarter, with prices quickly rebounding and regaining a foothold above $4,700 per ounce.
However, a senior technical analyst believes that this unprecedented deep correction is not yet truly over, and there are still significant downside risks in the future.
Senior technical analyst and founder of Elliott WaveTrader, Avi Gilbert, pointed out that he currently observes two distinct technical evolution paths, both of which could ultimately drive gold prices down significantly, even below the $4,000 mark, with a target range around $3,800.
This target price implies a further drop of approximately 20% from current levels. Spot gold is currently trading around $4,700 per ounce, indicating a significant short-term market recovery.
Gilbert stated that he is closely monitoring current price movements. The first path is relatively straightforward: gold prices will encounter strong resistance near current levels and then gradually shift to a downward trend. However, he emphasized that the second path is more dangerous and deceptive.
He explained that if gold prices successfully break through the resistance level of $4,800 per ounce, they could potentially rise further to around $5,200 in the short term. However, this rise is not a signal that the correction is over, but rather could mislead the market into believing that the adjustment is complete, thus creating a deeper downside risk at higher levels. He pointed out, "This path is more insidious or deceptive because higher prices will make everyone believe that the correction is over, when in fact the correction has just begun."
Gilbert's outlook for silver is highly consistent with that for gold. As long as silver prices remain below their March highs, he believes the downside risk will continue to point towards the $53.50 level. This assessment is also based on technical analysis, which indicates that the precious metals sector as a whole is still in a correction phase.
Despite significant short-term pullback pressure, Gilbert still made a special distinction between the strategies of traders and long-term investors.
He pointed out that if the target price level eventually translates into effective support, it would constitute a relatively ideal buying window for long-term investors. However, the strength and sustainability of the subsequent rebound will be key indicators for judging whether the overall trend remains in a long-term bull market or has shifted to a more prolonged bear market.
Gilbert also noted that the current technical structure of the precious metals market shares many similarities with the historical highs of 2011. This means that the price performance following the current pullback will largely determine whether history will repeat itself.
Regarding the long-term outlook for silver, he believes that any price below $60 presents significant investment value, even without ruling out the possibility of a further pullback to $40. He explicitly stated, "For silver, in the long term, any price below $60 over the next 10 years will be an excellent buying opportunity."
Furthermore, Gilbert highlighted the investment potential of the mining stock sector. He believes that in the next round of precious metal price increases, some mining stocks may significantly outperform the underlying metals themselves. Currently, some mining stocks have already bottomed out, while others are still in a correction phase, creating clear selective opportunities for investors within the sector.
He pointed out, "There are quite a few mining stocks that could outperform both silver and gold." He added that there are potential opportunities for both producers and developers, depending on whether their respective technical chart structures have formed favorable patterns.
In the broader commodities sector, Gilbert believes that oil prices may continue to maintain some upward momentum in the short term, but a significant pullback is expected later this year, with the possibility of even falling below $50.
Overall, Gilbert's analysis consistently prioritizes technical structures over macroeconomic narratives. He anticipates a series of key turning points in the coming months for gold, silver, related stocks, and commodities markets, warranting continued investor attention and cautious approach.
In conclusion , although gold has rebounded strongly to above $4,700 after a historically rare monthly plunge, the latest views from senior technical analysts such as Gilbert remind the market that this correction may not be over yet, and there are still two potential downside paths ahead, with a possible further drop of 20% to around $3,800.
For long-term investors, investing in silver and quality mining stocks at reasonable prices may still be attractive, but it is important to pay close attention to changes in technical signals to avoid making wrong decisions during deceptive rallies.
In the coming months, the performance of the precious metals and commodities markets will continue to test investors' judgment and patience.
Spot gold daily chart source: EasyForex
At 9:59 AM Beijing time on April 2nd, spot gold was trading at $4697.26 per ounce.
However, a senior technical analyst believes that this unprecedented deep correction is not yet truly over, and there are still significant downside risks in the future.
Avi Gilburt reveals two major technical paths for gold.
Senior technical analyst and founder of Elliott WaveTrader, Avi Gilbert, pointed out that he currently observes two distinct technical evolution paths, both of which could ultimately drive gold prices down significantly, even below the $4,000 mark, with a target range around $3,800.
This target price implies a further drop of approximately 20% from current levels. Spot gold is currently trading around $4,700 per ounce, indicating a significant short-term market recovery.
Gilbert stated that he is closely monitoring current price movements. The first path is relatively straightforward: gold prices will encounter strong resistance near current levels and then gradually shift to a downward trend. However, he emphasized that the second path is more dangerous and deceptive.
He explained that if gold prices successfully break through the resistance level of $4,800 per ounce, they could potentially rise further to around $5,200 in the short term. However, this rise is not a signal that the correction is over, but rather could mislead the market into believing that the adjustment is complete, thus creating a deeper downside risk at higher levels. He pointed out, "This path is more insidious or deceptive because higher prices will make everyone believe that the correction is over, when in fact the correction has just begun."
The silver market is also facing downward pressure.
Gilbert's outlook for silver is highly consistent with that for gold. As long as silver prices remain below their March highs, he believes the downside risk will continue to point towards the $53.50 level. This assessment is also based on technical analysis, which indicates that the precious metals sector as a whole is still in a correction phase.
Long-term investors may consider buying opportunities in mining stocks.
Despite significant short-term pullback pressure, Gilbert still made a special distinction between the strategies of traders and long-term investors.
He pointed out that if the target price level eventually translates into effective support, it would constitute a relatively ideal buying window for long-term investors. However, the strength and sustainability of the subsequent rebound will be key indicators for judging whether the overall trend remains in a long-term bull market or has shifted to a more prolonged bear market.
Gilbert also noted that the current technical structure of the precious metals market shares many similarities with the historical highs of 2011. This means that the price performance following the current pullback will largely determine whether history will repeat itself.
Regarding the long-term outlook for silver, he believes that any price below $60 presents significant investment value, even without ruling out the possibility of a further pullback to $40. He explicitly stated, "For silver, in the long term, any price below $60 over the next 10 years will be an excellent buying opportunity."
Furthermore, Gilbert highlighted the investment potential of the mining stock sector. He believes that in the next round of precious metal price increases, some mining stocks may significantly outperform the underlying metals themselves. Currently, some mining stocks have already bottomed out, while others are still in a correction phase, creating clear selective opportunities for investors within the sector.
He pointed out, "There are quite a few mining stocks that could outperform both silver and gold." He added that there are potential opportunities for both producers and developers, depending on whether their respective technical chart structures have formed favorable patterns.
The overall outlook for commodities remains primarily driven by technical structures.
In the broader commodities sector, Gilbert believes that oil prices may continue to maintain some upward momentum in the short term, but a significant pullback is expected later this year, with the possibility of even falling below $50.
Overall, Gilbert's analysis consistently prioritizes technical structures over macroeconomic narratives. He anticipates a series of key turning points in the coming months for gold, silver, related stocks, and commodities markets, warranting continued investor attention and cautious approach.
In conclusion , although gold has rebounded strongly to above $4,700 after a historically rare monthly plunge, the latest views from senior technical analysts such as Gilbert remind the market that this correction may not be over yet, and there are still two potential downside paths ahead, with a possible further drop of 20% to around $3,800.
For long-term investors, investing in silver and quality mining stocks at reasonable prices may still be attractive, but it is important to pay close attention to changes in technical signals to avoid making wrong decisions during deceptive rallies.
In the coming months, the performance of the precious metals and commodities markets will continue to test investors' judgment and patience.
Spot gold daily chart source: EasyForex
At 9:59 AM Beijing time on April 2nd, spot gold was trading at $4697.26 per ounce.
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