Gold prices are heading lower today thanks to both strength in the US dollar and rising US bond yields. If the precious metal continues to retreat, it will likely fall below our threshold for looking overbought. Gold is currently looking overbought on a daily chart. As we wrote in our US dollar daily update, the buck is rebounding after looking fairly oversold. US bond yields are also heading higher thanks to recent strength in crude oil prices which is improving the inflation outlook. As nominal yields rise while the US dollar rebounds, gold is unsurprisingly headed lower. 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 $1,334.
As gold prices gain on US dollar weakness, we are upgrading gold to bullish in the short-term. Note that gold is now looking overbought. This is based on various technical indicators on the daily chart.
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.