Gold Price Forecast – Liquidity Crunch Could Spark Broader Market Selloff

As long as the Strait of Hormuz remains closed, the risk of a global recession increases by the day—and the Fed may be unable to respond until after markets have already taken significant damage.

Soaring bond yields signal tightening liquidity and ongoing inflation concerns. With private credit already under pressure, the situation could deteriorate further, raising the risk of a significant market selloff in April.

10-Year Yields

After peaking slightly above 5.00% in 2023, the 10-year Treasury yield has largely been consolidating within a narrowing range. The conflict in Iran has pushed yields higher, reflecting inflation and growing liquidity concerns. A decisive breakout above the upper boundary near 4.60% would signal increasing stress, while a move to new highs could have severe consequences for financial markets.

Bond Market Volatility Warning

The MOVE Index, often referred to as the bond market’s equivalent of the VIX, surged to nearly 200 during the March 2023 banking crisis. It is now rising again, and a sustained breakout above the trendline near 120 would indicate growing stress in bond markets—potentially triggering significant fallout across broader financial markets.

Our Gold Cycle Indicator finished at 105, and we could soon enter minimum cycle bottoming.

Gold

Gold touched its 200-day moving average and is now attempting to find support around $4,400. While prices appear to be searching for a bottom, a broader liquidity crisis remains a significant risk. A sharp flush lower in the S&P 500 could trigger additional selling, pushing prices back towards or briefly below the 200-day MA. Overall, prices remain on track to reach $10,000 and higher later this decade.

Silver

Silver has fallen 50% from its January peak and is now attempting to stabilize just below $70.00. A broad market selloff (should it occur) could activate a retest of the $50.00 breakout level, which I would view as an attractive buying opportunity if it unfolds.

Platinum

Platinum is gradually moving back toward its 200-day moving average, where it could find support. A broad market selloff might push prices lower temporarily, but I view any level below $2,000 as an attractive long-term opportunity to buy physical.

GDX

Miners need progressively higher closes above the $88.11 price gap to confirm a bottom. Until that happens, the risk of a broader market selloff remains, which could push prices to or briefly below the 200-day moving average.

GDXJ

Junior miners need progressively higher closes above the $116.37 price gap to confirm a bottom. Until then, prices risk dipping to or briefly below the 200-day moving average.

SILJ

Silver juniors need progressive closes above the $29.26 gap to support an intermediate bottom. Until then, a test of the 200-day MA near $24.00 is possible.

S&P 500

One month into the conflict in Iran, markets are increasingly recognizing that this could be a prolonged event rather than a short‑lived shock, and that has heightened uncertainty and pressure on risk assets.

As long as key geopolitical risks remain unresolved and prices stay below critical thresholds like 6,500, the odds of a sudden flush lower grow. An all-out liquidity crisis could trigger a 20% correction or more into mid-year.

BTC/USD

Bitcoin is a key gauge of risk appetite and is often one of the first assets to sell off during a market downturn. Prices are breaking below the lower boundary of the two-month trendline, increasing the potential for an immediate decline. Sustained closes below $64,000 could trigger the next leg down toward $50,000 or lower in April or May.

Conclusion

It’s been a month since the Iran conflict began, and Trump has managed to keep oil prices in check and stocks somewhat elevated. However, markets are starting to see through the temporary calm, and we may be approaching a tipping point.

The risk of a sharp, broad-based selloff in April is increasing, with precious metals potentially caught in the rush for liquidity. Holding cash may be a prudent strategy until there is clarity on when the Strait of Hormuz will reopen.

AG Thorson is a registered CMT and an expert in technical analysis. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.