Gold prices are weaker this morning, mostly thanks to US dollar strength. Given gold's sensitivity to real interest rates, the precious metal is also selling off as nominal bond yields rise. Last week, we warned that gold was looking oversold on a daily chart. Now that gold is below $1,317, this is no longer the case. As gold strengthened from $1,240 to $1,300+ in a short period of time, the precious metal was due for a short-term correction. Following the ongoing correction, we believe that gold prices will continue pushing higher thanks to expected weakness in the US dollar. Our short-term outlook on gold remains bullish. If bullish momentum continues, we expect to upgrade our medium-term outlook to bullish shortly.
After its most recent bottom around $1,240, gold is now above $1,316.