Gold is trading lower for the third day in a row today. The precious metal sold off sharply yesterday as both the US dollar and US Treasury yields soared following the release of FOMC minutes. While gold initially jumped after the minutes were released, the precious metal sold off after the market digested the Fed's hawkish message. As we wrote in our US dollar daily update, the minutes increase the risk of four rate hikes this year (against expectations of three hikes). As gold trades inversely to real rates, the precious metal sold off as nominal interest rates soared. Looking at markets today, interest rates are currently taking a breather while the US dollar continues to climb. As a result, gold prices continue to fall. As bullish momentum is waning, we will downgrade our short-term outlook on gold to neutral later today. Our medium-term outlook remains bullish.
After its most recent top around $1,353, gold is now above $1,321.