After an incredible run-up starting on December 12, gold is pulling back this morning after heading into technical overbought territory on the daily chart. Given how quickly gold has strengthened in recent weeks, today's correction was fairly likely. Looking at the US dollar, the currency is bouncing back this morning. Meanwhile, US bond yields are also up. In general, the current macroeconomic environment is fairly supportive for gold. As US inflation remains subdued, the US dollar is likely to stay weak and this will help the precious metal going forward. Our short-term outlook on gold remains bullish.
After its most recent bottom around $1,240, gold is now above $1,312.
Following recent strength in gold, we are upgrading 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.