Gold is currently selling off as both the US dollar and bond yields go higher. The US dollar is mostly higher ahead of this week's Federal Reserve meeting. As economic indicators continue to point towards to accelerating US growth, there is a risk that Fed Chair Jerome Powell signals a faster pace of hikes at his first meeting. The currency is also strengthening on waning risk sentiment, thanks to a brewing political crisis in Japan and the rising risk of a global trade war. Turning to bond yields, US Treasury yields across all durations are higher today. 2-year Treasuries are currently yielding 2.312% while 10-year Treasuries are currently yielding 2.866%. All else held equal, gold becomes relatively less attractive as interest rates rise. Our short-term outlook on gold is neutral, while our medium-term outlook remains bullish.
After its most recent top around $1,334, gold is now above $1,309.
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.