The recent significant price correction in precious metals, particularly gold and silver, has led some experts to suggest they have entered a downtrend or even that a bear market cycle has begun.

This view is not shared here. The conclusion is that gold and silver are currently in a super-cycle bull market. From a technical analysis perspective, the current decline represents a fourth-wave correction within that larger bull market, likely in its middle to later stages. This fourth wave is expected to conclude around July or August of this year, after which a fifth wave advance is highly probable. Furthermore, the fifth wave in commodities is often the most powerful phase of the rally. For gold and silver, this fifth wave is likely to last over a year and has a strong chance of surpassing previous all-time highs.

Taking London silver as an example, this bull cycle began in March 2020. The first major wave lasted until January 2021, followed by a second-wave correction that ended around September 2022. A prolonged third major wave then unfolded for over three years, culminating in a new historical high of $121 in January 2026, from where the current fourth-wave correction commenced and is still ongoing.

Analyzing the structure of silver's fourth wave further, it appears to be unfolding as an A-B-C pattern. The A-wave declined to around $61 in late March, followed by a B-wave rebound to approximately $89 in mid-May. The market is currently in the C-wave, and it is likely that the C3 sub-wave has concluded. Given support on the yearly chart, a C4 rebound is anticipated, to be followed by a final C5 decline. The entire C-wave is expected to complete no later than the end of August this year, with a target zone around $50-$55.

Of course, technical analysis merely outlines a probable path based on chart patterns. The conviction that the precious metals bull market is not over stems from the fact that its fundamental underpinnings remain unchanged.

First, a primary argument for the bull market's end centers on the potential for the Federal Reserve to enter a rate-hiking cycle, with rising U.S. Treasury yields suppressing gold prices. Indeed, heightened market expectations for Fed rate hikes have been a key driver of the recent precious metals correction. Based solely on employment and inflation data, a case for Fed tightening to combat inflation seems plausible. However, as a close ally of former President Trump, the Fed Chair, while publicly upholding the Fed's independence, is unlikely to significantly oppose Trump on major policy decisions.

Moreover, the recent uptick in U.S. inflation is largely attributed to rising international oil prices driven by geopolitical tensions. Rate hikes are ineffective against inflation caused by such geopolitical risks and could instead induce economic volatility. From a rational standpoint, the Fed is unlikely to hastily initiate a tightening cycle. Additionally, efforts to de-escalate tensions and curb oil prices, while their long-term efficacy is questionable, have at least temporarily prevented a further oil price surge, buying the Fed some time. No Fed rate hikes are anticipated in the second half of this year. Once market fears of imminent hikes are disproven around July or August, gold and silver are likely to complete their correction and embark on a new upleg.

Second, a crucial supportive force for gold—central bank purchases—has not ceased but has accelerated during the price correction. Notably, the Chinese central bank has increased its buying scale over the past three months, taking advantage of lower prices. Comparatively, gold's share in China's foreign exchange reserves remains below that of other major global economies, and there is a significant gap in absolute holdings. With China's forex reserves continuing to grow, the People's Bank of China has substantial room to further increase its gold reserves. This ongoing potential for significant buying provides solid support for gold's price floor. In the coming months, sustained buying by the Chinese central bank, especially on price dips, will help restore market confidence.

Third, the underlying issues of the U.S.'s expanding national debt and fiscal deficits remain unaddressed. This trajectory suggests the U.S. may ultimately resort to currency debasement to sustain its debt dynamics. In the short term, the U.S. dollar's strength is partly fueled by safe-haven demand due to persistent geopolitical conflicts. However, as geopolitical stalemates continue, the market will eventually recognize the inevitable decline of U.S. power and the dollar's dominance. The dollar is ultimately expected to resume a depreciating trend, against which gold will reassert its upward trajectory.