After falling sharply yesterday, gold prices are flat this morning. While the precious metal is weaker, reactions in gold have been limited by the challenge of bringing about tax cuts. As the House and the Senate have passed different versions of the tax bill, the reconciliation process includes the potential for delays and pitfalls. Furthermore, there is the threat of a US government shutdown if the debt ceiling is not raised this coming Friday. As political concerns remain on the horizon, weakness in gold should remain limited. Ultimately, the precious metal is likely to sell off in the medium-term once concerns regarding taxes and the debt ceiling dissipate. At that point, we will downgrade our outlook accordingly. Our short-term and medium-term outlook on gold remain neutral.
After its most recent top around $1,299, gold is now below $1,275.
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.