Gold fell sharply yesterday thanks to recent strength in the US dollar. The dollar soared after President Trump said he wanted a "strong dollar" and expected the dollar to get "stronger and stronger". Trump is currently attending the World Economic Forum in Davos, Switzerland. As the precious metal was looking technically overbought on a daily chart, it was particularly susceptible to a pull-back. Gold is now trading within a normal range after its recent correction. In the longer-term, gold prices can continue rising thanks to an ongoing US dollar bear market. Looking at US 10-year government bond yields, rising bond yields have not helped gold today. 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 $1,355.
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.