Gold prices remain at highs last seen in early September 2017. Gold is slightly lower today thanks to a rebound in the US dollar. Looking at US bond yields, 10-year government bond yields are falling today. Given gold's sensitivity to real interest rates, the precious metal typically rallies when real rates fall. Thus today's weakness is mostly a function of US dollar strength. As gold looks overbought on a daily chart, we have been warning that a short-term pull back is increasingly likely. In the longer-term, the trend remains bullish thanks to an ongoing US dollar bear market and weak inflation expectations. Our short-term and medium-term trending indicators suggest that gold remains in a bullish trend .
After its most recent bottom around $1,240, gold is now above $1,339.
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.