Gold prices rose sharply yesterday, thanks to falling real interest rates. US bond yields and inflation expectations fell after the House and Senate produced fairly different versions of the tax bill. As markets lower their expectations of the bill getting through Congress, real rates are falling as a result. This morning, gold prices are down slightly despite the fact that US bond yields continue to fall. Yesterday, we upgraded our short-term outlook on gold to bullish. Looking at technical indicators, gold is trading within normal conditions and is neither overbought nor oversold.
After its most recent top above $1,300, gold is now above $1,283.