Gold prices once again fell sharply yesterday. The precious metal began selling off after Senator John McCain publicly backed the tax bill. This initially led to a significant rally in the US dollar and stocks. Conversely, gold and bonds fell on the news and inflation expectations rose. Later in the day, deficit hawks led by Senator Bob Corker sought to introduce an amendment to the tax bill. As this delays the vote, bonds and gold recovered some of their losses as a result. The precious metal is currently flat. Our outlook on gold remains mildly bullish despite the significant sell-off in the past few days. If current trends continue, we will consider downgrading our outlook.
After its most recent top around $1,299, gold is now below $1,275.
As gold prices rise above $1,290, 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 weakness in gold, we are downgrading the precious metal to neutral in the medium-term. The precious metal is trading within normal conditions. This is based on technical indicators on a weekly chart.