Gold Hits $3,500 Before Expected Downturn
Gold surged past $3,200 in April, peaking at $3,500 on April 22—aligning with our forecast of a cycle top between April 16-23. Now, signs point to a sharp multi-month decline, potentially 20% or more, with prices likely falling below $3,000 in May.
Why Gold Could Crash in May
- Cycle Indicator Topping: Our Gold Cycle Indicator has rolled over from maximum bullish levels, signaling exhaustion.
- Overbought Conditions: The weekly gold chart spiked above the 10-week EMA envelope ($3,418), a classic blowoff top signal seen in 2020 and 2022 before major corrections.
- Stock Market Correlation: Historically, gold peaks after equities—similar to 2022 (S&P top in January, gold top in March). The S&P 500 peaked on February 19, 2025, and gold rallied 17% before its April 22 high.
Gold Price Prediction: How Low Could It Go?
- Initial Target: A swift drop below $3,000 is possible as leveraged traders unwind positions.
- Longer-Term Outlook: A deeper pullback toward $2,800 is expected over the next few months.
- Silver & Miners Also at Risk:
- Silver (XAG/USD) failed to break $35, with a potential drop to $26 before resuming its uptrend.
- Gold Miners (GDX) could see a 30%+ correction, possibly falling below $40.
- Junior Miners (GDXJ & SILJ) may also decline, with GDXJ at risk of breaking $50.
Long-Term Bullish Outlook Remains Intact
Despite the expected correction, this is likely just a pause in a multi-year bull market. Key projections:
- Gold could surpass $8,000 later this decade.
- Silver may skyrocket past $200 once paper price suppression ends.
Bottom Line: Prepare for Volatility
- Short-Term (May): Brace for a sharp drop in gold, possibly below $3,000.
- Mid-Term (2024-2025): A deeper retracement to $2,800 is probable before the next rally.
- Long-Term (2030): Gold and silver remain in a secular bull market with massive upside potential.
AG Thorson, CMT
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