Gold prices are taking a breather today. Yesterday, gold surged thanks to fears of US military action in Syria following Trump's tweets. In a classic sign of rising geopolitical fears, both gold and crude oil surged simultaneously. Other safe haven assets such as US Treasury bonds also strengthened (bond yields fell), while the US dollar remained weak. While gold rose above its previous highs, the precious metal was unable to close above $1,355. As we wrote in yesterday's update, this region remains a significant area of resistance for the precious metal.
Today, gold is trading sideways as the dollar enjoys a small rebound and US Treasury yields decline. In recent history, gold has benefited from decelerating growth and rising risks thanks to limited reactions in the US dollar. After a series of lower-highs, gold has struggled to close above the $1,355 region. Our short-term and medium-term outlook on gold remains bullish.
After its most recent top around $1,353, gold is now above $1,350.
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.