Gold prices are mirroring moves in the US dollar this morning. As the US dollar rebounds, gold is selling off. Looking at technical indicators on a daily chart, gold prices are still looking slightly overbought. While we expect the short-term correction to continue, the longer term outlook for gold remains bright. Thanks to strong global growth and muted inflation, the precious metal should continue rallying. While the US Federal Reserve's current policies have kept gold prices in check over Janet Yellen's term, the new Fed Chair (Jerome Powell) may be looking to shake things up. While the consensus view is that Powell will follow Yellen's lead, how he ultimately shapes future monetary policy remains to be seen. Our short-term outlook on gold remains bullish.
After its most recent bottom around $1,240, gold is now above $1,318.