Gold fell yesterday and continues to fall today. The precious metal is weaker as optimism relating to US tax cuts continues to grow. Looking at recent news, Senate and House Republicans are starting to make compromises relating to the future tax plans. Looking at the latest news from Bloomberg, proposals being discussed include higher corporate tax rates and retaining the SALT deduction. The precious metal is rallying in spite of a Friday deadline to extend the US government debt ceiling. As GDP growth remains strong and inflation expectations (driven by tax cut hopes) rise, the precious metal is likely to enter a bearish medium-term trend. Our trending indicators continue to suggest a neutral medium-term trend, but we are likely to downgrade gold in the next few weeks if the precious metal remains weak. Our short-term outlook is bearish.
After its most recent top around $1,299, gold is now below $1,257.
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.