Gold prices are falling today. Yesterday, the precious metal rebounded following three days of sell-offs. While US Treasury yields rose yesterday, gold was helped by weakness in the US dollar.
Today, gold prices are falling as both the US dollar and US Treasury yields rise. Thanks to strong US economic growth, rising inflation is stoking fears that the Federal Reserve may be more aggressive in raising interest rates. As a result, bond yields are soaring. 10-year Treasury bonds are currently yielding 3.017%. The last time 10-year Treasuries traded near similar levels was back in April 2011. The dollar is also rising as US growth outperforms its global peers. Given gold's sensitivity to dollar strength, the ongoing bullish trend is increasingly at risk. If the dollar enters a bullish trend, expect the precious metal to weaken accordingly. Our short-term outlook is neutral, while our medium-term outlook on gold remains bullish.
After its most recent top around $1,353, gold is now above $1,324.
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.