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Jules Rimmer: What a steepening gold futures curve says about demand
By Jules Rimmer
MarketWatch, New York
Tuesday, May 13, 2025
During the relief rally staged by markets after the U.S.-China trade deal, the price of gold faltered and now stands 5% below its peak set in the first week of May. But steepening futures contracts and central bank purchases suggest that underlying demand is robust and this year's rally still has legs.
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As illustrated by this chart from Correlation Economics --
https://x.com/GoldForecast/status/1922182749676245468
-- the gold futures curve is steepening -- a bullish indicator. Traders are betting prices will rise.
Given the extent of the rally in risk assets with the S&P 500 rebounding 15% from its April trough, a much larger correction in gold might have been expected. In fact, most of the fall in gold can be attributed simply to a 4% recovery in its reciprocal, the dollar.
This implies that the underlying trends in gold, as a hedge against inflation, tariff uncertainty, dollar debasement, and market volatility are still intact. If they were not, the futures curve would have succumbed to a bear flattening. ...
... For the remainder of the analysis:
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