After registering small gains last Friday, gold is once again up slightly this morning. The US dollar is lower this morning, helping the precious metal. As we wrote in this morning's US dollar daily update, despite increasing optimism that the tax bill will pass this week, reactions in the US dollar have been limited. While House and Senate Republicans have largely reconciled their differences, Senator John McCain will skip the vote for health reasons while Thad Cochran is expected to return this week. Until the bill gets through Congress, the US dollar remains on the defensive. Gold has been rising since the latest Federal Reserve meeting. As doubts regarding future rate hikes increase, gold is likely to benefit as a result. Despite recent strength, our trending indicators for both the short-term and the long-term suggest a bearish outlook.
After its most recent bottom around $1,240, 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.