After a tough week for gold, the precious metal is again weaker today. This weekend, the Wall Street Journal claimed that Trump has made up his mind regarding Jerome Powell as the next Federal Reserve Chair - although the decision has yet to be formally announced. Despite the news, which should be positive for gold (given Powell's beliefs that monetary conditions should remain relatively 'easy'), gold is lower today. As we wrote last week, the outlook for gold is weak given the current macroeconomic environment of accelerating GDP growth and inflation working in tandem. Despite speculation regarding the future Fed Chair, the reality is that the Chair alone is unable to single-handedly change the direction of monetary policy. While there are a large number of vacancies at the Fed today, more positions need to be filled by the White House for future monetary policy to become clearer.
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 below $1,270. Our medium-term outlook on gold remains bearish.