Gold is trading sideways today, despite falling US bond yields and rising geopolitical risks. As we wrote in our US dollar daily update, risk sentiment is waning as the probability of a global trade war increases. According to recent media reports, the Trump administration is seeking to reduce the trade deficit with China by at least $100b per year. Riskier assets such as commodities and equities fell following the news, while safe havens such as US Treasuries strengthened (Treasury yields fell). The US dollar also strengthened following the news. Reactions in gold were fairly limited, despite gold's role as a safe haven. As gold remains in a medium-term bullish trend, we expect gold prices to keep rallying. Our short-term outlook on gold is neutral, while our medium-term outlook remains bullish.
After its most recent top around $1,340, gold is now above $1,324.
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.