Gold and silver fell sharply on April 13, with a chart strategist warning of further downside as rising oil prices, a stronger U.S. dollar, and higher bond yields pressure precious metals.
Gareth Soloway, chief market strategist at Verified Investing, pointed to a clear bearish signal on the gold chart after prices dropped 1.5%. He noted a wedge pattern where gold repeatedly failed to break above resistance despite bouncing off support. The $4,000 level has become a critical pivot, with $3,975 as the next defense line. A break below that could lead to a deeper correction, he said, as a strong dollar and rising interest rates cap gold's upside.
Silver's bear flag pattern
Silver is showing an even more precarious technical setup, according to Soloway. It has already broken a key support level and failed to retrace, forming a bear flag pattern. The crucial level is $58; if it breaks, the next targets are $54, then $50, and possibly $46. Silver is already near $54–55, close to the upper end of the downside target range. Soloway expects one more leg lower before a bottom forms.
Long-term gold outlook remains bullish
Despite short-term headwinds, Soloway maintains a long-term bullish view on gold. He noted that past bear markets have shortened, driven by rising government debt and quantitative easing. He estimates gold could correct 30–37% from its recent peak, with a bear-market low around $3,500. However, the next bull cycle could push prices to $13,000, though that is a long-term model projection, not a short-term target.
In summary, the current sell-off appears to be a correction driven by macro factors rather than a trend reversal. But if the $4,000 and $58 supports give way, volatility in precious metals could increase significantly in the near term.