SCALES (Slicer Combined with Array of Lenslets for Exoplanet Spectroscopy) is a high-contrast lenslet-based integral field spectrograph (IFS) designed to characterize exoplanet atmospheres in the 2 - 5 micron wavelength range. The SCALES medium-resolution mode provides the ability to characterize exoplanets at increased spectral resolution via the use of a lenslet subarray with a 0.34 x 0.36 arcsecond field of view and an image slicer. We use the SCALES simulator scalessim to generate high-fidelity mock observations of planets in the mediumresolution mode that include realistic Keck adaptive optics performance, as well as other atmospheric and instrumental noise effects, to simulate planet detections, and then employ angular differential imaging to extract the planet spectra. Analyzing the recovered spectra from these simulations allows us to quantify the effects of systematic noise sources on planet characterization, in particular residual speckle noise following angular differential data processing. We use these simulated recovered spectra to explore SCALES’ ability to constrain molecular abundances and disequilibrium chemistry in giant exoplanet atmospheres.