Gold prices are once again weaker today, as the US dollar rebound continues. As we wrote in our US dollar daily update earlier today, the dollar is bouncing from oversold technical conditions as traders cover their short positions. Thanks to an upcoming Federal Reserve meeting tomorrow, markets have adopted a more cautious tone. While the probability of a rate hike is fairly limited (as tomorrow's meeting does not contain a press event), there is a risk that the Fed's statement signals tighter monetary policy in the near future. The consensus expects three to four rate hikes this year. Gold has benefited from easy monetary conditions in recent history. Thanks to strong global growth, the US dollar remains in a longer-term bear market, and gold should resume strengthening in the near future. 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 $1,335.
As gold prices gain, 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, 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.