Gold prices are lower today, after falling yesterday. While the US dollar rebound has paused today, US Treasury yields continue to strengthen. Looking at 10-year US Treasuries, yields are approaching highs last achieved a few days ago, and are trading around 2.84%. As gold trades inversely to real interest rates, rising nominal rates are typically bad for the precious metal. Recent gold weakness is largely the result of a strengthening dollar and rising interest rates. As gold has run out of momentum in the short-term, we have downgraded our short-term outlook to neutral. In the longer-term, bullish momentum remains intact and gold prices can keep strengthening. As we wrote in a recent commentary, the longer-term outlook for gold remains positive.
After its most recent bottom around $1,240, gold is now above $1,313.
As gold runs out of steam, we are downgrading gold to neutral 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.