April Gold: Are We Cracking 1300 Soon?

March 9, 2018 8:58AM CST

April gold has seen range bound trade for months now and has very clear areas of support and resistance. Right now, April gold is trading around 1317, down 5 on the day. Looking at where gold is likely to find support is around the very psychologically and technically important level of 1300. This also marks the 200-day moving average. A drop to around 1292 also marks an important level where a 62% retracement level drawn from the December 12 low to the January 25 high would come into play.

If you look at where gold could go from here, bearish factors would include a lack of volatility continuing minus the February selloff and a lack of any war rhetoric from North Korea after Trump has agreed to sit down with the leader. Inflation is expected to be a very real issue this year, and if the Fed steps up to increase interest rates higher than three times we could see gold come under very real pressure. On the contrary, we could see the opposite if interest rates are being raised at that rate it could indicate a very toppy stock market and a flight to safe haven assets such as gold could result. Another bearish factor we must consider here is with Trump imposing strong tariffs on steel and aluminum from countries around the world we could see a slowdown in global growth based on a trade war. China is sure to be the top target on the list with the highest US trade deficit, and their retaliation could be quite burdensome for the US economy.

Gold Apr '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.