After falling in the previous week, gold is showing some signs of strength this week. While our medium-term outlook remains bearish, our short-term outlook is now neutral. US bond yields continued to fall yesterday, following news that corporate tax cuts may be phased in over time. The market has also been digesting news that Jerome Powell is likely to be the next Fed Chair, suggesting that Yellen's low interest rate policies are more likely to continue. As recent news points to lower interest rates, bond yields continue to fall. Given gold's inverse relationship to real interest rates, the precious metal has been gaining.
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 $1,276.