Gold has been range bound this week. The precious metal fell yesterday and is rebounding this morning. Looking at technical indicators, gold is looking oversold in the short-term time frame. While a small rebound is likely to be in store, the longer term outlook for gold remains weak. With economic growth and inflation set to accelerate in tandem, the Fed is likely to turn more hawkish, despite the high likelihood of a future Fed Chair that leans towards lower interest rates (Jerome Powell). Later today, the House is set to publish the first draft of the tax bill. If the bill is in line with expectations, gold may fall further as inflation expectations increase. We published our broader thoughts on the upcoming tax bill in a commentary last night.
Looking at technical indicators, gold is starting to look oversold today. After its most recent top above $1,300, gold is now below $1,276.