February Gold, Expect Another Leg Down?

December 15, 2017 9:14AM CST

February Gold has seen quite the pullback, but a recent bounce should give traders an opportunity to consider selling into. Let's build the case for gold pulling back once more. The most recent economic data suggests that the economy is not only fine, but flourishing. Jobless claims, and business optimism suggests that there will be more of a flight from safe haven assets such as gold, and a push into more “risk on” assets. There is a slight bull edge recently with the Alabama election win for a Democratic senator suggesting that the edge in the Senate will make passage of any future laws that much harder for the GOP. This could potentially disrupt the massive run in equity markets over the past year. You are seeing minimal buying interest in gold as North Korea continues to pursue nuclear weapons, and rebuffing an attempt to “just come to the table” as Secretary of State Rex Tillerson has asked. It looks as if any hopes of a diplomatic solution are fading by the day. For the most part, the fundamentals all suggest flight from the precious metal over the next few weeks.

A technical perspective on gold will review a much murkier picture. We did bounce off minor support around the 1235 level, however, a retest of 1215 is much more likely than a bounce to 1280 where the 200-day moving average sits. There is not much in terms of support until we reach the July 10th level of 1214.50. Traders should be aware of this and average into the trade if they are looking to play a downside move. There are conservative ways to trade gold without using outright futures as well. For more information on how to trade gold, please contact me directly.

Gold Feb '18 Daily Chart


RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.