Gold Daily Updates

05 October 2017

While gold was quite strong at the start of the day yesterday, the precious metal has since fallen back down to around $1,275. Following strong US PMI data yesterday, interest rate hike expectations are rising. As gold is highly sensitive to real interest rates, the precious metal failed to stay above $1,280. Our short-term outlook on gold remains neutral. Despite Trump's Twitter comments this weekend suggesting that diplomatic talks with North Korea would be of limited use, gold has not strengthened as political tensions rise. 

After its most recent peak close to $1,350, gold is now well under $1,300. The precious metal is currently trading around $1,275. 

Short term outlook

After rebounding on October 3 and 4, gold is now in neutral. The precious metal has been trading in oversold conditions based on various technical indicators on the daily chart. Earlier, gold fell following Yellen's speech in which she reiterated the need to continue hiking rates, despite uncertainty regarding the future path of inflation. 

Medium term outlook

Looking at the medium term picture, we remain bearish on gold in the medium term. Gold is currently correcting, having entered overbought conditions in early September. The recent bout has accelerated following the Federal Reserve's suggestion that future interest rate hikes are likely and Donald Trump's tax plan. Today, prices have re-entered normal trading conditions when looking at various technical indicators, and gold no longer looks overbought.