Gold is higher today, mostly thanks to ongoing weakness in the US dollar. The US dollar is currently at three-year lows thanks to relative strength in the euro and the Japanese yen. The euro is higher following strong sentiment data that suggests the Eurozone's economy will continue expanding this year. The Japanese yen is higher following the latest Bank of Japan meeting. While the BoJ has maintained the status quo, traders are betting that Bank will soon begin tightening its monetary policies following the ECB. Looking at US bond yields, most nominal bond yields are higher today. Higher nominal bond yields typically lead to lower gold prices (as the precious metal trades inversely to real interest rates). Today, gold appears to be strengthening in spite of higher yields. Finally, gold is looking overbought on a daily chart. While the precious metal is poised to keep strengthening, gold looks due for a short-term correction. 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 $1,343.
As gold prices gain, 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, 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.