Weekend Briefing: Gold Landed Hard at $4,539. Next Week's Flight Plan Has Three Weather Systems.
Every aviator knows the debrief is as important as the flight. Gold’s week ending May 16 deserves an honest debrief — and then a careful look at what next week’s weather systems will require from pilots and passengers alike.
The debrief. Gold opened the week near $4,720 and landed Friday at $4,539 — a 4% decline, the worst weekly performance since the war began. Five headwinds hit in sequence: CPI at 3.8% (the hottest since May 2023), PPI surging at its fastest pace since 2022, India raising gold import tariffs from 6% to 15%, the Empire State Manufacturing index jumping to 19.5 and removing the recession-floor argument for gold, and the dollar hitting its strongest level since the war began. Five headwinds, five sessions, one hard landing.
But note the landing strip. Gold came down to $4,539 — which is exactly the lowest level since early March, and precisely the level where technical analysts identify the first major structural support zone at $4,540 to $4,500. The aircraft has not crashed. It has landed, firmly but intact, at a known support level. Whether it stays there or bounces depends on next week’s weather.
Weather system one — Wednesday May 20: FOMC minutes. The Federal Reserve’s May 7 meeting minutes will be published. This is the cabin pressure reading. If the minutes indicate Fed officials discussed conditions for a rate hike, the cabin depressurises fast and gold tests $4,450. If the minutes are balanced and uncertainty-focused, the cabin stabilises and gold finds buyers.
Weather system two — Thursday May 21: PMI data. Manufacturing and services activity for May. Strong PMI supports the dollar and pressures gold. Weak PMI opens the stagflation trade — gold positive on a medium-term horizon.
Weather system three — Friday May 22: Michigan inflation expectations. Consumer inflation expectations trending lower is the tail-wind gold needs. Trending higher is more headwind.
The Beijing variable. Trump-Xi concluded Friday with the joint statement that Hormuz must stay open, China opposing militarisation, and reports of Chinese vessels transiting under new protocols. This is a significant navigational change. If Iran responds to the new Chinese position and peace talks resume in earnest, the oil headwind that has grounded gold for three months begins to lift. At that point, gold does not gradually climb. It surges.
The destination — Goldman Sachs’s $5,400, J.P. Morgan’s $6,000 to $6,300 — has not moved. The aircraft is at $4,539. Next week tells us how long the layover lasts.
