Gold Chartbook – Resilient at High Levels

As anticipated four weeks ago, gold prices in May indeed moved sideways within a volatile trading range, roughly between USD 3,200 and USD 3,350. Two weeks ago, the bears briefly triggered a sharp but short-lived sell-off down to USD 3,120. However, buyers swiftly re-entered the market, pushing the gold price toward a monthly closing at USD 3,289 by the weekend. Gold Chartbook – Resilient at High Levels.

After the wild price fluctuations in the first four and a half months of this year, the gold market is gradually stabilizing, albeit slowly. Given the strong price gains since the start of the year, the ongoing healthy consolidation has been remarkably stable, clearly holding above the key psychological level of USD 3,000.

Meanwhile, physical supply remains tight, forcing wholesalers seeking to extend their gold lease agreements to repurchase the precious metal in some cases. While trading activity for the COMEX June contract and its associated options was relatively subdued, the typically inactive May contract surprised with the highest physical deliveries for an inactive contract in COMEX history. Notably, the number of open contracts one day before expiration was exceptionally high, indicating supply constraints for short positions.

Overall, Western demand for physical gold in 2025 has been driven primarily by private investors, family offices, and select banks. This led to gold transfers, including from the LBMA in London to COMEX vaults, to meet the surging demand. Following a significant demand peak from February to April, net buying activity in May has nearly dropped to zero. The low open interest in the June contract further suggests a temporary pause in the demand boom.

Shanghai Gold Exchange: Volume and Premium Trends

Trading Volume at the Shanghai Gold Exchange, May 30, 2025. ©InProved Analytics

In China, the Shanghai Gold Exchange (SGE) experienced a notable decline in trading volume, dropping by 20.5% compared to the previous week, despite having recorded an all-time high earlier in May 2025. This pullback suggests a cooling of the intense buying activity that characterized the market earlier in the month.

Premiums at the Shanghai Gold Exchange, May 30, 2025. ©InProved Analytics

However, premiums at the SGE, China’s premier gold exchange, have remained relatively stable relative to the LBMA benchmark, indicating sustained demand for physical gold and persistent supply constraints. This combination of reduced trading volume and elevated premiums highlights a market where enthusiasm has tempered but underlying bullish sentiment continues to support higher pricing relative to global standards.

Gold in US-Dollar, Weekly chart – Consolidation Might Need More Time

Gold in USD, weekly chart as of June 1st, 2025. Source: Tradingview

After a furious rally since the beginning of the year, gold reached a new all time-high at USD 3,500 on April 22nd. Since then, gold has been correcting in a rather volatile fashion. The expected pullback reached our initial target of USD 3,120 on May 15th. From there, gold prices rebounded sharply over the following six trading days, reaching USD 3,365.

However, during the course of last week, bears managed to defend the downtrend line (in place since April 22nd) and were able to briefly push gold prices back towards USD 3,247. Of course, buyers came quickly back into the market, but gold was not able to reconquer the resistance around USD 3.330. The weekly close came in slightly below the round number of USD 3,300 at USD 3,289.

Overall, the weekly chart highlights the active stochastic sell signal and points towards an ongoing consolidation that will need more time. Ideally, and especially after the impressive rally, the stochastic oscillator would now be on the way towards an oversold setup. This could certainly take some more weeks and would fit very well with the weak month of June. However, we assume that the consolidation will comfortably play out above USD 3,000.

Gold in US-Dollar, Daily chart – Still in a Consolidation Triangle

Gold in USD, daily chart as of June 1st, 2025. Source: Tradingview

Since April 22nd, the price action has remained within a triangular consolidation pattern. Bulls repeatedly tested the red downward trend-line of the past five weeks but were not able to achieve a breakout. As of now, this would require a decisive move above USD 3,330. Should this occur, the open price gap between USD 3,422 and USD 3,428 is likely to act as a magnet for gold prices.

Despite the recent decline in trading volume, the daily stochastic oscillator is still on a buy signal, suggesting that bullish momentum remains intact in the short-term. We anticipate that the bulls may attempt to challenge the downtrend line again in the coming week. However, it looks like they might fail again.

On the downside, prices could dip to around USD 3,135– USD 3,150 within the triangle without breaking the pattern. A drop below the recent significant low of USD 3,120, however, would indicate a more pronounced correction.

In summary, June might see the bears coming back into business as long as the red downtrend line remains intact. If the bulls lose confidence and momentum, another pullback toward USD 3,200 is conceivable. Hence, we suspect, or perhaps fear, that the tricky and persistent sideways phase at these elevated levels may continue for a few more weeks, with high volatility and erratic price swings keeping market participants on edge.

Conclusion: Gold Resilient at High Levels.

In May 2025, gold prices entered the anticipated consolidation phase, marked by volatile sideways trading between USD 3,120 and USD 3,430. Despite a brief dip to USD 3,120, the market displayed resilience, bolstered by new buyers and sustained physical demand. The ability of this healthy consolidation to hold firmly above the psychological USD 3,000 level highlights the robustness of the ongoing bull market, even as the demand surge from earlier months noticeably slowed in May. Record physical deliveries for the inactive COMEX May contract, alongside a high number of open contracts, underscore persistent supply constraints shaping the market.

Technically, gold remains confined within a consolidation triangle, with repeated but unsuccessful attempts to break above the downward trendline. A decisive move above USD 3,330 could pave the way toward the price gap at USD 3,422 to USD 3,428, while retreats to USD 3,135–USD 3,150 within the triangle would remain within normal bounds. The ongoing volatility and protracted sideways movement may continue to challenge market participants’ patience in the weeks ahead. Nevertheless, the long-term bullish trend remains firmly intact, with the current consolidation serving as a healthy pause. The new all-time high of USD 3,500 is likely just a milestone on the path to further gains.

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Disclosure:

First Mining Gold is a sponsor of Midas Touch Consulting. First Mining Gold has no editorial control or veto rights. Midas Touch Consulting and members of our team might be invested in First Mining Gold. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.