After strengthening yesterday, gold continues to make gains this morning. The precious metal has been benefiting from recent weakness in the US dollar. As we wrote in this morning's US dollar daily update, the currency is selling off despite fairly high certainty that the tax bill will pass. While US stock markets continue to make record highs, the dollar remains weak. Given dollar weakness, the market appears to be questioning whether or not tax cuts will ultimately drive future inflation and rate hikes. While our short-term outlook on gold remains bearish, we expect to upgrade our outlook over the coming days thanks to recent gold strength. Our medium-term outlook remains bearish.
After its most recent bottom around $1,240, gold is now above $1,263.
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.