Gold prices are currently falling. Yesterday, gold prices initially surged after China retaliated against US tariffs, and targeted US exports including soybeans, aircraft and vehicles. Later in the day, gold prices changed course after Larry Kudlow, a White House official, sought to calm fears. While US stock markets suffered from a significant sell-off at the start of the day, the S&P 500 ended the day more than 1% higher. As risk sentiment rebounded, gold suffered in relative terms.
Today, the precious metal is down as both the US dollar and US Treasury yields are rising. The dollar is broadly higher against all major currencies. Looking at US Treasuries, 10-year Treasury yields are currently trading at 2.818% while 2-year Treasury yields have strengthened to 2.311%. As nominal yields rise while the dollar strengthens, gold is looking less attractive in relative terms. Our short-term outlook is now neutral, while our medium-term outlook on gold is bullish.
After its most recent top around $1,353, gold is now above $1,326.