After breaking out above $1,280 yesterday, gold sellers once again emerged during US trading hours. The price of the precious metal declined from around $1,289 to end the day around $1,277. A similar pattern occurred last Friday. Looking at recent prices, gold has traded in a range since late November. As GDP growth remains strong while inflation is accelerating, the outlook for gold is weak thanks to the higher probability of rate hikes via the Federal Reserve. The upcoming US House tax vote will be a significant event for gold, given that lower taxes improves the inflation outlook. Later today, we'll also see Eurozone inflation numbers. If inflation in the euro area is higher than expected, this would also improve the global inflation outlook. Yesterday we upgraded our short-term outlook on gold to neutral. 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 $1,277.