Gold ended the day flat yesterday and remains flat this morning. Whether or not the precious metal can hold the $1,290 range remains to be seen. In general, gold is benefiting from doubts regarding future inflation. FOMC minutes suggest that many Federal Reserve Board members are questioning inflation in 2018. Similarly, the ECB's minutes suggested that the bank was unable to define an end-date for quantitative easing given low inflation in the Eurozone. With the upcoming US Senate tax vote next week, our view is that gold should continue to appreciate. Our short-term outlook remains bullish.
After its most recent top above $1,300, gold is now above $1,290.
As gold prices rise thanks to weak inflation expectations, we are upgrading gold to bullish in the short-term. Gold is neither overbought nor oversold today and continues to trade within normal conditions. This is based on various technical indicators on the daily chart.
Following a recent selloff in gold above $1,280, we are downgrading the precious metal to neutral in the medium-term. While gold was looking overbought earlier in October, the precious metal is now trading within normal conditions. This is based on technical indicators on a weekly chart.