Looking to the Futures

Gold prices have been range bound since last week's all time high over $3500. The dollar fell yesterday providing support for gold prices. Dovish comments from the ECB Governing council members were bullish for precious metals to start the week. US economic news came in weaker than expected yesterday; markets are pricing in and rates will go unchanged in the May FOMC meeting.

Traders saw volatility in the dollar yesterday, originally trading higher but pulling back into the close. US Treasury Secretary Bessent stated the US is working on bilateral trade deals with 17 key trading partners, not including China, which led to a rally in the dollar early Monday morning. However, economic concerns following the Apr Dallas fed manufacturing survey led to a selloff in the dollar, which pushed gold prices higher. President Trump stated the US would not lower tariffs on China unless, "they give us something substantial," causing significant concerns that the US-China trade war could linger and weigh on US growth prospects.

The euro was able to recover from early losses on Monday despite dovish comments from the ECB. ECB governing Council member Villeroy de Galhau said that the ECB has room to lower interest rates as the trade war triggered by US tariffs will weigh on the global economy but may not affect the inflation trend in Europe. ECB Governing Council member Rehn signaled potential monetary policy, stating " I find it reasonable to assume that there are downside risks to the inflation outlook in the ECB's March projections." These comments were bullish for gold prices. 

US economic news came in weaker than expected. The US Apr Dallas Fed manufacturing survey of general business activity index dropped -19.5 points to a 5-year low of -35.8, missing the expected -17.0. Markets are very skeptical of a rate cut in the upcoming May FOMC announcement. According to the CME FedWatch tool there is a 9.0% chance of a -25 bp rate cut on May 7^th.

Looking at the daily chart for the Gold Futures June 2025 (/GCM25) contract we can see prices have been range bound over the past 4 trading sessions following an all-time high print over $3500 last Tuesday. Volume has been above average as volatility has increased over the past 3 weeks, with safe haven demand on the rise. The contract traded off the 50-Day Simple Moving Average in early April and has not tested the 20-Day or the 50-Day SMA price point since then. 

The Hightower Research Daily Technical Summary has support levels at 3265.10 and 3215.30 with resistance levels at 3374.30 and 3433.80.

According to the CFTC Commitment of Traders report released April 22^nd managed money traders have decreased their long positions by -2,040 contracts and increased their short positions by +1,912 contracts. Managed money traders are net long 120,902 contracts. 

The 14-Day Relative Strength Index at 62.58% gold contracts are moving into overbought territory.

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