Gold prices are higher today, as global risk sentiment turns sour following recent Italian elections. Looking at bonds, US Treasury yields are currently falling. Bond yields fall when demand for the asset increases. 10-year US Treasuries are currently yielding 2.825%. 2-year and 30-year Treasury yields are also lower today. As the euro weakens in response to rising political risks, the US dollar is strengthening in relative terms. While a rising USD is usually negative for gold, falling nominal interest rates and weakening risk sentiment is helping the precious metal climb higher. As the outlook for global growth and accelerating inflation worsen, we expect gold to remain in a bull market. Our short-term outlook on gold is neutral, while our medium-term outlook remains bullish.
After its most recent top around $1,353, gold is now above $1,326.