Weekly Gold Market Report – Week Ending May 19, 2025
Commodity Price Summary and Technical Analysis
Gold surged above $3,200 early in the week as risk aversion spiked (e.g. due to safe-haven flows) but then pulled back by week’s end. By May 19 spot gold was near $3,240–$3,250 (June futures around $3,247 on Monday) before retreating; by Friday May 16 it had fallen to ~$3,188. Overall, gold lost roughly 4% during the week, its worst weekly drop since last November, following a record-high ~$3,500 in April. The main driver was profit-taking after U.S.-China trade tensions eased (tariff truce) and global stocks rallied, reducing safe-haven demand
A weaker dollar and rising short-term volatility did temper losses by mid-May, but the correction left gold in a firm but cautious technical pattern.
Trend: Gold’s April rally (record intraday $3,500) was followed by a pullback. The break below $3,200 on May 15 was seen as a bearish continuation, with momentum indicators (daily RSI around 42 and Stochastics ~37 on May 15) pointing lower
By May 19, however, the 14-day RSI had rebounded to the low‐50s (about 52.9, neutral zone) and MACD turned modestly positive, reflecting the price bounce from the week’s lows.
Support/Resistance: Key technical levels have been identified in the $3,100–$3,300 range. On the downside, immediate support is near $3,133–$3,135 (last week’s low) and then ~$3,100. A close below $3,100 could open the way to $3,060
On the upside, resistance lies at $3,170–$3,200 (notably the 61.8% retracement of April’s rally) and then $3,230–$3,300. Bulls would need a close above $3,300 to regain the uptrend. According to technical analysts, the next upside targets would be around $3,230 and then $3,265–$3,300, while breakdown risks focus on $3,133–$3,100
Patterns & Indicators: Chart patterns in early May suggested a bearish flag/pullback after the steep rally. The 5-day average turned down through the 10-day, and the RSI dipped into neutral territory before rebounding. Momentum indicators are mixed: as of May 19 RSI ≈53 (neutral), Stochastics ~45 (neutral-to-oversold), while MACD has crossed slightly positive. Average True Range is elevated, indicating continued volatility. Commodity analysts note that gold’s momentum may remain subdued until more fundamental clarity emerges, with a possible short-term consolidation in the $3,200–$3,250 range before the next major move.
Macroeconomic Drivers
Gold’s moves this week were heavily influenced by evolving macro drivers:
Inflation & Fed Policy: U.S. inflation data remain benign: April CPI rose just 0.2% (2.3% y/y, the smallest gain since 2021). Similarly, U.S. Producer Price Index and retail sales in mid-May undershot expectations. Slower inflation and weaker growth data have cemented Fed rate-cut expectations later in 2025. Markets are still pricing in roughly two Fed rate cuts starting in September. Fed Chair Powell has reiterated that current policy is “moderately restrictive”, and Fed officials have emphasized patience. These factors help cap real yields and support gold; however, U.S. 10-year real yields (nominal yield minus inflation) have risen toward ~2.2%, which is the highest level in years. Higher real rates tend to pressure gold, so any renewed rise (e.g. if inflation stays above target) could constrain gold’s upside
Dollar & Yields: The U.S. dollar index weakened modestly mid-week. For example, on May 19 the dollar hit its lowest in about a week. A softer dollar makes gold cheaper for foreign buyers, aiding bullion. Meanwhile, U.S. Treasury yields firmed on some risk-on and fiscal concerns: the 10-year note was around 4.5% on May 19. Steepening nominal yields, if sustained, could draw demand away from gold, but much depends on inflation expectations. Real yields (10y TIPS) in the 2.0–2.2% range remain relatively supportive for gold, as inflation is expected to remain near 2–2.5% over the medium term.
Central Bank Policy (Fed/ECB/PBOC): The U.S. Fed has paused after late-2024 cuts, implying stable rates for now. In the Eurozone, the ECB cut its deposit rate by 25bp to 2.25% in April, and signaled readiness to cut further; market consensus is for ~50bp of cuts by year-end
Lower Eurozone rates and softer Euro inflation are generally supportive of gold (weaker Euro can make gold more attractive globally). In China, authorities are trying to cushion trade-war fallout: in early May the PBOC announced stimulus (rate cuts and liquidity injections) and loosened gold import quotas so banks can buy dollars for gold purchases. These moves aim both to boost gold demand and to slow Yuan gains. Notably, China’s central bank added to its gold stockpile for the sixth consecutive month in April, reflecting steady official demand.
Geopolitical Factors: Gold is trading amid some significant geopolitical news. A 90-day trade truce between the U.S. and China (announced May 15) has reduced tariff tensions for now, fueling risk appetite and pressuring gold. However, uncertainty remains; any flare-up in U.S.-China trade talks or other conflicts could quickly revitalize safe-haven demand. On May 19, Moody’s downgraded the U.S. credit rating to Aa1. That day gold rose nearly 1% on the news, as investors viewed gold as a hedge against U.S. fiscal risks. Other geopolitical developments — such as hints of progress in the Ukraine war (Trump-Putin talks) — have so far had limited impact on bullion. In summary, gold is being tugged between diminished trade-war fears (bearish) and ongoing global uncertainties (bullish).
Mining and Physical Supply Developments
Operations & Disruptions: The gold mining sector saw notable supply-side events this week. Barrick Gold’s largest mine (Loulo-Gounkoto, Mali) remains shut after Mali’s government seized ~3 tonnes of gold (worth ~$318 million) and detained four executives in a tax dispute. Barrick said it is spending $15m/month to maintain the site and excludes Loulo-Gounkoto from its 2025 production forecas. In Mexico, Equinox Gold announced an indefinite suspension of its Los Filos mine (Guerrero) after a land-access agreement lapsed. Equinox is renegotiating with local communities; for now its 2025 guidance omits Los Filos output. In Peru’s Pataz district, the government ordered a 30-day halt to mining operations after 13 miners (contractors to local firm Poderosa) were kidnapped and killed by illegal miners. That security crackdown could dent Peruvian gold output near term, although it mainly affects small-scale operations. Project Updates: On the expansion front, AngloGold Ashanti is moving ahead with plans to grow production at its Egyptian Sukari mine. In mid-May Egypt’s prime minister met AngloGold officials, reaffirming support and promising to remove obstacles for investment. AngloGold’s CEO indicated the company will inject additional capital at Sukari and explore similar deposits in Egypt. These steps should boost future supply from Egypt. (Outside the week, major miners like Newmont and Barrick have also announced asset sales and divestitures, but new project news in mid-May was limited.) Physical Demand: Central bank buying of gold remains robust. In Q1 2025, official net purchases totaled ~244 tonnes, keeping gold reserves near record highs globally. China’s central bank continued its buying streak (6th straight month) in April. Central bank demand is being complemented by massive investment demand: World Gold Council data show Q1 ETF inflows and bar/coin purchases spiked, driving total demand to seven-year highs. (Jewellery demand, by contrast, is down at multi-year lows due to high prices.) There were no major central bank sales announced this week.
Investor Sentiment and Market Outlook
ETF Flows: Global gold ETFs have seen record inflows in recent months. April saw a whopping $11.0 billion of net inflows into physically-backed gold funds (the largest since March 2022), lifting total ETF holdings to ~$3,561 tonnes and an all-time AUM high of about $379bn. Asian funds (led by China) accounted for the bulk of April demand. However, in the latest week to May 19 some profit-taking emerged: for example, the largest fund GLD saw about $1.2 billion of outflows
Overall, ETF positioning remains extreme (heavy long exposure), so further inflows or outflows could amplify price swings. Futures Positioning: CFTC data as of May 13 show speculators were still net long gold, but their positions had been trimmed sharply. Hedge funds’ net long gold futures were at 14-month lows. Saxo analysts noted that even though gold fell ~5% after the trade-truce news, hedge funds only made modest further reductions to their net longs. In other words, speculative positioning was already quite bearish (few longs left to sell), suggesting any renewed rally could trigger short-covering. Technical analysts warn that a sustained drop below $3,200 could unlock more liquidation, while a stabilizing around current levels might encourage fresh speculative longs. Outlook Commentary: Many analysts remain cautiously bullish on gold over the medium term. RJO’s Bob Haberkorn this week called gold “a good safe bet” over the next few months in light of U.S. fiscal/credit concerns, and advocated a buy-and-hold stance. Major banks echo this view: Goldman Sachs reiterated targets of $3,700 by end-2025 and $4,000 by mid-2026, citing gold’s diversification appeal amid persistent policy and recession risks. Gold’s strong performance (up ~23% YTD) and underlying ETF and coin demand support these optimistic forecasts. World Gold Council research also expects tailwinds from “US policy and structural risks” to keep investment demand elevated. Comparison with Other “Safe Havens”: – U.S. Treasuries: After Moody’s downgrade on May 17, U.S. 10-year yields briefly spiked (as bond investors demanded higher premiums for perceived risk) before settling around 4.5%. While higher yields can make bonds more attractive than gold, political risks (debt ceiling, ratings) may limit further declines in yields. Gold’s appeal as a non‑cash asset may grow if Treasury yields jump unpredictably.
Bitcoin: Cryptocurrency markets have shown a mixed relationship with gold. Bitcoin rallied this week on improving risk sentiment – touching roughly $103,000 on May 9– whereas gold dipped. Recent analysis finds Bitcoin’s 30‑day price correlation with gold has turned sharply negative (around –0.54 as of May 19). This suggests traders view BTC more as a “risk-on” asset short-term, while gold remains the primary safe-haven hedge. (Over longer windows, the 90‑day Bitcoin-gold correlation is mildly positive, ~+0.39 ,reflecting both as hedges against macro uncertainty.) In any case, Bitcoin’s record highs and volatility point to different drivers from gold.
Silver and Others: Silver, platinum and palladium also headed for weekly losses in line with gold,though platinum has seen new jewellery demand (China) and remains relatively cheap. Industrial and energy commodities (oil, copper) have rallied on the trade truce, contrasting with precious metals.
Overall Sentiment: Investor sentiment towards gold is cautious but not bearish. The pullback this week was largely seen as healthy profit-taking in an extended bull market. As WGC notes, gold’s price action reflects a mix of factors: a weak dollar and risk-off dynamics have been key drivers, and those conditions may return intermittently
For now, the consensus is that gold’s bull market remains intact, but its path will be volatile. Any new inflation surprise, renewed Fed easing bias, or geopolitical shock could reignite aggressive buying. Conversely, a durable economic rebound (or steeper yields) could temporarily weigh on bullion. Many analysts suggest holding some gold exposure as insurance, given ongoing global uncertainties
Data & Charts: The attached charts illustrate gold’s recent price action and technical indicators (source: market data). Key data points cited above come from reputable market and central bank
Sources: Reporting by commodity news agencies (Reuters, Kitco/Metals Daily), gold market research (World Gold Council), and financial data providers (Investing.com
