Gold is currently hovering around $1,346. The precious metal is managing to hold on to gains as bond yields strengthen while the US dollar weakens. Last week, the precious metal soared as both the US dollar and bond yields remained weak. As an alternative to fiat-based investments, gold serves as an insurance policy when the banking system is under strain. Looking at the dollar, the currency is currently selling off against all major currencies except the Japanese yen. Looking at bonds, US Treasury yields are higher today ahead of significant US Treasury sales this week. 10-year US Treasuries are currently yielding 2.848% while 2-year Treasuries are yielding 2.289%. As gold trades inversely to real interest rates, the precious metal tends to weaken when US dollar rates head higher. Later today, we will upgrade short-term outlook on gold to bullish. Our medium-term outlook remains bullish.
After its most recent bottom around $1,311, gold is now above $1,347.
As gold makes gains, 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.