The risk-reward in Gold markets has deteriorated following the sharp rally. 

Macro traders still appear somewhat underpositioned for a Fed cutting cycle, but the striking dislocation in their positioning relative to rates market pricing has now largely dissipated with markets expecting fewer cuts and as discretionary traders were forced to cover a large chunk of their net short. 

The extreme buying activity from Shanghai traders also appears to be running out of steam.

Gold prices can still firm further, but the additional gains will now rely more heavily on macro tailwinds, which dampens the risk-reward from current levels.