As of: 05/30/2025 by Florian Grummes

As predicted four weeks ago, gold prices moved sideways in May in a volatile trading range between about $3,200 and $3,350. Two weeks ago, there was a sharp but short-lived sell-off down to $3,120, before buyers quickly returned. Just before the weekend, the gold price is now aiming for a monthly closing price around $3,300.

After the wild price fluctuations in the first four and a half months of this year, calm is slowly and gradually returning to the gold market. Given the strong price increases since the beginning of the year, the healthy consolidation is proceeding surprisingly stable and clearly above the round psychological mark of $3,000.

The physical supply remains limited, forcing wholesalers to sometimes buy back precious metals when extending gold leasing contracts. Although trading activities for the COMEX June contract and associated options were low, the usually inactive May contract recorded record-breaking physical deliveries. Particularly noteworthy is that the number of unfulfilled contracts one day before expiration was exceptionally high, indicating shortages in short positions.

Overall, Western gold demand in 2025 has so far been driven primarily by private investors and family offices as well as some banks.

This led to gold being transferred from the LBMA in London (London Bullion Market Association) to COMEX vaults to serve the exploding demand.

After a significant demand peak in the months of February to April, net buying activity in May has now almost dropped to zero.

The low “open interest” in the June contract also indicates a temporary end to the demand boom.

Trading volume at the Shanghai Gold Exchange as of May 30, 2025. ©InProved Analytics

In China, however, trading volume has decreased by 20.5% compared to the previous week. A record trading volume was still recorded at the beginning of the month.

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

Nevertheless, the premiums at the SGE (Shanghai Gold Exchange), China’s most important gold exchange, remained relatively stable compared to the LBMA benchmark.

Gold in USD – Still in Consolidation Triangle

Gold in US Dollars, daily chart from May 30, 2025. ©GOLD.DE

On May 15, 2025, the pullback reached our first target of $3,120.

From here, the gold quotations were able to recover significantly to $3,365 in the following six trading days.

Nevertheless, the overall price action continues to move in a triangle consolidation, with primarily the red downward trendline of the last five weeks being repeatedly attacked recently.

A breakout has not yet succeeded for the bulls and would currently require prices clearly above $3,330. If this is achieved, the open price gap in the range of $3,422 to $3,428 should soon attract gold prices magnetically.

On the downside, however, gold prices could easily move within the triangle down to about $3,135 – $3,150 without a clear decision being made. Only below the last significant low point at $3,120 would the correction expand significantly in price.

We suspect or fear that the tricky and tenacious sideways phase at a high level in the gold market could continue for a few more weeks, with market participants continuing to be swayed by high volatility and wild back-and-forth movements. Nevertheless, the bull market remains intact and currently seems to be merely taking a healthy breather.

Therefore, the new all-time high at $3,500 should remain only a transit station.

Conclusion: Gold – Consolidation at a High Level

Gold prices have undergone the expected consolidation phase in May 2025, which in retrospect was characterized by a volatile sideways movement between $3,120 and $3,430.

Despite the short-term pullback to $3,120, the gold market showed resilience, supported by new buyers and continued stable physical demand.

The fact that the healthy and necessary consolidation has so far been clearly above the psychological mark of 3,000 US dollars underscores the strength of the ongoing bull market, even though the momentum of the demand boom from previous months has significantly decreased in May.

The record deliveries for the inactive COMEX May contract and the high number of unfulfilled contracts indicate a persistent physical supply shortage that evidently continues to characterize the gold market.

Technically speaking, the gold price remains trapped in a consolidation triangle for the time being. Despite several persistent attempts, the breakout above the downward trendline has (not yet) succeeded.

A breakout above 3,330 US dollars could open the door to the small price gap between 3,422 and 3,428 US dollars, while setbacks to 3,135-3,150 US dollars within the triangle formation would still be uncritical.

The ongoing volatility and the tenacious sideways phase could further test the patience of market participants in the coming weeks.

Nevertheless, the long-term bull market for the gold price remains intact, with the current consolidation merely being viewed as a healthy breather.