Gold prices are currently heading lower. Yesterday, the precious metal strengthened at the outset of the day, but lost ground later in the day. As we wrote in our US dollar daily update earlier today, the buck moved up following speeches from the Fed's Bullard and Commerce Secretary Wilbur Ross. The US dollar remains supported in an environment of high growth and accelerating inflation. The dollar is also being helped by weak growth outside the United States. The same factors are helping US bond yields. Ultimately, higher interest rates and a stronger currency are negatives for gold.
Turning to gold today, the precious metal continues to sell off. Later today, we will downgrade our short-term outlook back to bearish, while keeping our medium-term outlook in neutral. While we expect a more supportive environment for gold later this year, strong growth and accelerating inflation expectations means that the Federal Reserve is a real threat for the precious metal today. Once growth more clearly decelerates, the threat of rate hikes will have a smaller influence on gold prices. We explained this dynamic in last week's gold daily update. US 10-year Treasury yields managed to close above 3% yesterday, and are currently yielding 3.023%.
After its most recent bottom around $1,303, gold is now above $1,311.
As gold prices give up recent gains, we are now bearish 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.
As gold weakens, we are now bearish on the precious metal in the medium-term. The precious metal is trading within normal conditions. This is based on technical indicators on a weekly chart.