Gold prices are mostly flat today, after selling off sharply in the previous trading session. Last Friday, the precious metal weakened following strong US non-farm payrolls numbers that beat expectations. Thanks to rising rate hike expectations, the dollar and US Treasury yields soared following the report. Today, gold is treading water despite continued strength in US Treasury yields. As gold trades inversely to real interest rates, rising nominal yields (all else held equal) is typically negative for the precious metal. Today, both yields and inflation expectations are strengthening. The US dollar is mostly flat. As we wrote in a recent commentary, we expect gold to keep strengthening in spite of upcoming rate hikes in 2018. While tighter monetary policy will cause short-term corrections, strong ex-US growth should keep gold on a strengthening path. 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 $1,348.
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.