Gold Investor's Weekly Update: May 17, 2025
Gold continues declining into its intermediate cycle low driven by the coming May 27th options expiration.
The target-price for gold has been narrowed to $3,050 based on confluence of supports converging around that level.
Our minimum target for gold during the next intermediate cycle advance is $3,600 with a preliminary timing of August to mid-October. For silver, the expectation remains $46 (+/-$3) with a similar timing which would constitute an approximate +50% advance over the coming months.
The primary force pressuring the gold price lower remains the approaching Jun’25 gold option expiration on May 27th. With six trading days remaining until that date, the gold price continues to drift lower as it gradually brings itself back into equilibrium with the fundamentals of the contract.
Starting on Wednesday, the gold price broke below the support-level of its double-top reversal pattern. After briefly dipping down to tag gold’s upwards sloping trendline, it then bounced to retest that prior support level from below on both Thursday and Friday. Each time, the level held as resistance which suggests gold’s path-of-least-resistance continues to be down. Considering how well the gold price is adhering to this technical analysis pattern, our conviction increases that the gold price will ultimately test the pattern’s target-zone around the $3,050 level.
As of last week, our target-zone expectation for this coming intermediate cycle low (ICL) was between of $3,050 to $3,150. However, at this point, we will narrow the expectation to the bottom-end of that range and focus on $3,050 as the target. This is because a confluence of independent support zones have or are in the process of converging around the $3,050 level. These include,
the target for the above mentioned double-top pattern at ~$3,050,
the 100d EMA level (which has acted as support since gold breakout in March 2024) will be up to $3,050 by late-May,
the max-pain price for the soon to expire Jun’25 gold options contract remains steady at $3,050, and
the middle of our mid-cycle (+85%) recurring support/resistance zone is currently at $3,042 (+/-$82).
In addition, an ICL down to around $3,050 would constitute an approximate 50% retrace of the prior advance from $2,541 to $3,500 (GC). Figure 3 shows that historically, this is the maximum retrace one should expect during a transition-period for gold. So far, the brief dip down to $3,120 on Thursday only constituted a 40% retrace.
Taking a step back we can consider the big-picture view for gold. Since breaking out and beginning its current bull-market advance back in March 2024, gold has progressed through as series of stair-steps upwards using our long-term recurring support/resistance zones to help define each step. If gold can indeed form its low within the mid-cycle (+85%) zone as shown in Figure 4, that would further reinforce our prior view that a 4th intermediate cycle advance should be expected.
In which case, at minimum we would expect the gold price to re-tag the top recurring resistance zone labelled as mid-cycle (+115%) in Figure 5. As for the timing of the high, our preliminary expectation is between August to mid-October. Any later than that and price would begin coming under pressure from the always large, Dec’25 gold options contract which expires on Nov 24th. Currently, that contact has a max-pain price of $2,900 so we can already anticipate that pressure on price is likely to be downward as we approach that date.
