Gold prices are falling sharply this morning after rising on Friday. Gold prices began rallying on Friday following a report by ABC. The news organization reported that Michael Flynn was prepared to testify that Trump directed him to make contact with Russia while he was a candidate. Over the weekend, this report was proven to be false. The US Senate also passed the tax bill on Friday. The final step is to reconcile the House and Senate versions of the tax bill. Now that both documents have been passed in each respective chamber, the odds of tax cuts becoming reality is much greater. As political risks (relating to Russian interference claims) decrease and inflation expectations increase, gold is selling off as a result. Later this morning, we will downgrade our short-term outlook to neutral as the precious metal runs out of steam.
After its most recent top around $1,299, gold is now below $1,273.
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.