BIT Research: After Gold’s Sudden Plunge, Why It Might Actually Be Headed Faster Toward $5,000

The current market is undergoing a macro repricing phase dominated by the trajectory of the US dollar and interest rate paths. Although gold has experienced a notable correction recently, its overall bullish structure remains intact. On one hand, the market is repricing the risk of an interest rate hike within this year; on the other hand, there is a widespread expectation that the next Federal Reserve Chair, Kevin Warsh, might lean dovish. There is a clear tension between these two factors, implying that the current market pricing of the interest rate path may be unsustainable. Once the market begins to correct this expectation, the US dollar could weaken again, and real interest rates are expected to decline, thereby opening up room for gold to rise once more.

From a trading signal perspective, both quantitative and trend models have recently turned stronger simultaneously. Historical data shows that after the last 10 instances of similar signals being triggered, gold's average increase over the subsequent two months was approximately 12.8%, corresponding to a target price of around $5,306, with a historical win rate of about 70%. Meanwhile, the DXY attempted to break above the 100 mark three times in July 2025, November 2025, and March 2026, each time failing, indicating that the momentum for a US dollar rebound is weakening. Against this backdrop, this article believes this correction is closer to a phase adjustment rather than a trend reversal.

Repricing of the Dollar and Interest Rates: The Core Logic for Gold Remains Unchanged

Over the coming months, the core variable for gold remains the repricing of the US interest rate path. Powell has confirmed that the late April FOMC meeting will be his last as Chair, and the June 17 FOMC meeting will be Kevin Warsh's first since taking office. Warsh has repeatedly stated that the productivity improvements brought by AI have a deflationary effect, and the market generally expects his policy stance to be more dovish than the current one.

However, at the same time, the market has fully priced out expectations of a rate cut this year and has even begun to price in a rate hike. This pricing logic itself contains a clear contradiction. If the June dot plot begins to refute the current market expectation of "one rate hike this year," gold could rapidly reprice upwards. The September 16 FOMC meeting is also viewed as a critical window. Historically, after rate cuts in September of 2024 and 2025, both gold and Bitcoin experienced significant increases.

Concurrently, US debt expansion and fiscal pressures are also strengthening the long-term logic for gold. The US national debt has now reached $39 trillion, an increase of approximately $2.7 trillion since the "Big and Beautiful Bill" was passed in July 2025. Gold has corrected, but the debt has not contracted. Once the market returns to the logic of liquidity and fiscal expansion, gold is expected to challenge its all-time highs again.

Technical and Capital Structure Improvement: Gold May Enter a New Upward Phase

From a technical analysis perspective, gold's current structure remains positive. During this adjustment phase, the gold price found significant support in the $4,300 to $4,400 range, and further raised its lows in early May, stabilizing around $4,500. The pattern of continuously higher lows indicates that the bullish structure remains intact. Gold is currently consolidating energy within a narrow triangle pattern. Once it breaks out to the upside, it is expected to challenge its previous all-time highs again.

Looking at historical patterns, gold has long progressed in increments of roughly $1,000 per tier. Therefore, $5,300 could be a reasonable target for the next phase, while $6,300 could be a potential target for later this year or next year. At the same time, several catalysts are approaching in the coming months, including the Trump-Xi meeting in May, the FOMC meeting in June, the BRICS summit in July, and the US fiscal cliff in September. As the market begins to reprice the dollar, interest rates, and the liquidity path, gold's relative advantage could be further strengthened.

Overall, although the magnitude of this gold correction is significant, the trend structure has not been broken. A weakening US dollar, repricing of interest rate paths, global reserve diversification, and US fiscal pressure are gradually forming a new macro resonance. Meanwhile, quantitative and trend models have strengthened in tandem, and several key catalysts are still set to materialize in the coming months. For the market, the key factor at this stage is no longer just short-term inflation fluctuations, but rather when the market will return to the logic of liquidity and policy easing. Once this process begins, gold may enter a new phase of accelerated upward movement.

Some of the above views are from BIT on Target. Contact us to get the full BIT on Target report.

Disclaimer: The market carries risks, and investment should be made cautiously. This article does not constitute investment advice. Digital asset transactions may involve significant risks and instability. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.