Gold prices continue to shoot up thanks to weakness in the US dollar. The precious metal is now trading above $1,340 and is close to highs it last achieved in early September 2017. Looking at the last few days, US bond yields have been mostly flat. Instead of rising yields, the main driver of the price action in gold has been weakness in the US dollar. As we wrote in our US dollar daily update, the US dollar index is currently languishing near 3-year lows. As global economic conditions remain benign, the dollar bear market looks set to continue. Looking at technical conditions, gold is once again looking overbought on a daily chart. Beyond a short-term pull back, gold prices look set to go higher. Our short-term and medium-term outlook on gold remains bullish.
After its most recent bottom around $1,240, gold is now above $1,341.
Following recent strength in gold and weakness in the dollar, we are upgrading the precious metal to bullish in the medium-term. The precious metal is trading within normal conditions. This is based on technical indicators on a weekly chart.