Gold prices are currently slightly lower. Last week, the precious metal sold off sharply (particularly towards the end of the week) as both the US dollar and interest strengthened. Earlier this year, the dollar sold off despite rising rates. At the time, optimism for global growth was very high. More recently, the dollar appears to have re-established its traditional relationship with interest rates. As global growth decelerates, the dollar is now rising alongside accelerating interest rates.
Looking at gold trading today, the precious metal is only down slightly despite rising US bond yields and strength in the dollar. 10-year US Treasury bonds are currently yielding 2.977%, matching highs last seen in April 2011. Following its rapid gains at the outset of the year, gold has been unable to make a higher-high above $1,355 region. As expectations for future rate hikes increase, the precious metal is likely to enter a neutral trend in the near future. For now, the outlook for gold remains mildly bullish as the dollar remains subdued. Our short-term outlook is neutral, while our medium-term outlook on gold remains bullish.
After its most recent top around $1,353, gold is now above $1,332.
As gold prices trade sideways, we are now neutral on gold in the short-term. Note that gold is now trading within a normal range. This is based on various technical indicators on the daily chart.
Following recent strength in gold, we are upgrading the precious metal to bullish in the medium-term. The precious metal is trading within normal conditions. This is based on technical indicators on a weekly chart.