Gold is slightly weaker this morning thanks to some strength in the US dollar. There have been limited reactions in markets following the recent US government shutdown. In our US dollar daily update published earlier today, we wrote that US government shutdowns have been fairly common in recent history. The shutdown is only a real concern if Democrats and Republicans are unable to strike a deal over an extended period of time. Looking at bond yields, most US government bond yields are lower today. 10-year yields are currently trading at 2.651% after strengthening beyond 2.60% last week. Lower bond yields typically help gold prices (as the precious metal trades inversely to real interest rates). While gold is correcting today, we expect the precious metal to continue strengthening over the longer term. 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 $1,329.
As gold prices gain on US dollar weakness, we are upgrading gold to bullish in the short-term. Note that gold is now trading within a normal range. 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.