(Kitco News) - After its biggest monthly loss since the early 1980s, gold has started the new month and the second quarter on a strong footing, with prices back above $4,700 an ounce. However, one market analyst suggests that the unprecedented correction is not over.
In an interview with Kitco News, Avi Gilburt, veteran technical analyst and founder of ElliottWaveTrader, said he sees two distinct technical paths that could ultimately drive the precious metal below $4,000, toward $3,800 an ounce.
Gilburt’s target represents another 20% drop from current prices. Spot gold is currently trading at $4,775.10 an ounce, up more than 2% on the day.
Gilburt said he is closely watching current price action, as the first path would see prices hit resistance near current levels and then trend lower. However, he added that the second path is more dangerous.
He said he will be watching to see if gold prices break resistance at $4,800 an ounce, which could then push prices to $5,200 before triggering his expected downtrend.
“This path is more evil or deceptive, because the higher prices will convince everyone that the correction is over, but it's really just getting started,” he said.
For silver, his outlook mirrors that of gold. As long as prices remain below the recent March high, he sees downside risk toward the $53.50 level.
However, Gilburt also highlighted the difference between traders and investors. He said that if his target level holds as support, it could present a buying opportunity, although the subsequent rally will be key in determining whether the broader trend remains bullish or shifts into a longer-term bear phase.
Gilburt also pointed to similarities between current market structures and the 2011 peak in precious metals, suggesting that how prices behave after the current correction could determine whether history repeats itself.
For long-term investors, he sees significant value in silver below $60, although he does not rule out the possibility of a deeper pullback toward $40.
“For silver, long term—over the next 10 years—anything under $60 will represent a great buying opportunity,” he said.
Beyond gold and silver, Gilburt highlighted opportunities in mining equities, which he believes could outperform the underlying metals during the next rally phase. He noted that some mining stocks have already bottomed, while others remain in corrective patterns, creating selective opportunities across the sector.
“There are a number of mining stocks that can potentially outperform both silver and gold,” he said, adding that opportunities exist across producers and developers, depending on their individual chart structures.
Looking at broader commodities, Gilburt said oil prices may still move higher in the near term, but he expects a significant decline later this year, with the potential for prices to fall below $50.
Overall, he said his outlook remains driven by technical structure rather than macroeconomic narratives, with key inflection points in gold, silver, equities, and commodities expected to emerge in the coming months.
