Gold managed to reverse its decline yesterday, and has rebounded to $1,280 this morning. We have upgraded our short-term outlook to neutral accordingly. While recent US economic data has been very strong (which typically causes gold weakness on rising rate hike expectations), gold has managed to climb despite good data. Yesterday's durable goods and new house sales figures point to continued strength in the US economy. Looking at trading action in the past 24 hours, other safe havens such as the Japanese yen and the Swiss franc are also rising. While there is limited political news, John Taylor and Jerome Powell remain the leading candidates to be the next Federal Reserve Chair.
Looking at technical indicators, gold is neither overbought nor oversold today and is trading within normal conditions. After its most recent top above $1,300, gold is now above $1,280. Our medium-term outlook on gold remains bearish.