Gold prices are currently lower thanks to both strength in the US dollar and rising US Treasury yields. As we wrote in our US dollar daily update earlier today, the dollar is currently rebounding despite fears of increasing government deficits and accelerating inflation. As the buck remains in a longer-term bear market, we expect the current upturn to be fairly short-lived. Looking at US Treasuries, yields are higher today and are currently trading at levels last seen in 2011. Thanks to falling commodity prices since January and base effects (at this time last year, inflation was fairly high), we expect a more moderate outlook for inflation going forward. While gold is falling today, the longer-term bull market is intact. Our short-term outlook and our medium-term outlook on gold remains bullish.
After its most recent bottom around $1,315, gold is now above $1,337.
As gold strengthens, 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.