Gold prices are currently falling. Yesterday, gold sold off as US bond yields strengthened sharply. The precious metal was also influenced by a rising US dollar. As crude oil prices spike, rising inflation is helping the dollar strengthen.
Looking at gold trading today, the precious metal has been fairly resilient despite accelerating US Treasury yields and some strength in the US dollar. As we wrote in today's US dollar daily update, the dollar has failed to strengthen in response to rising inflation in the past. As global growth starts decelerating, the currency is more likely to re-establish its traditional relationship with interest rates as investors stop chasing international investment opportunities. If the dollar rebounds in response to rising rates, expect gold prices to sell off accordingly. We will downgrade our short-term outlook to neutral later today, while our medium-term outlook on gold remains bullish.
After its most recent top around $1,353, gold is now above $1,341.
As gold prices trade sideways, we are now neutral on gold 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.