Gold prices are lower today, as the US dollar rebounds. As we wrote in our US dollar daily update earlier today, the dollar is strengthening in relative terms as the euro and other European currencies weaken. As gold is mostly traded against the US dollar, the precious metal is weakening accordingly. Looking at US bond yields, 10-year Treasury yields are rising today (currently yielding 2.876%), leading to further weakness in gold. As gold trades inversely to real interest rates, rising nominal rates are typically negative for the precious metal (assuming inflation expectations do not rise faster than nominal yields). Our short-term outlook on gold is neutral, while our medium-term outlook remains bullish.
After its most recent top around $1,353, gold is now above $1,318.
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.