After giving up some of its gains yesterday, gold is strengthening this morning. Gold prices are now back to where they were on last Wednesday. The precious metal has been helped by US tax-related worries. As we wrote in this morning's US dollar daily update, last-minute negotiations are causing uncertainty with regards to the tax bill. While the bill is likely to pass, uncertainty regarding the changes are driving down the dollar (and helping gold). If and when the tax bill passes, the increased certainty with regards to future taxes should strengthen the dollar (and result in gold weakness ). Despite recent strength, our trending indicators for both the short-term and the long-term suggest a bearish outlook.
After its most recent top around $1,299, gold is now above $1,256.
As gold prices fall on US political news, we are downgrading gold to bearish 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 recent weakness in gold, we are downgrading the precious metal to bearish in the medium-term. The precious metal is trading within normal conditions. This is based on technical indicators on a weekly chart.