Is April Gold Finally Going to Breakout?

March 23, 2018 8:40AM CDT

Gold has finally found its footing on what is an obvious slide in equities, and what could ignite into something much bigger than a tit for tat with China. Trump has fired what appears to be the first shots against China with a $60B tariff against all steel and aluminum products coming from China. They have retaliated in what looks like a restrained manner by imposing their own tariffs on $3B worth of US imports of fruit and wine. The much larger concern is that they have drawn a list of 128 products that are now potential targets of additional duties. Another reason we are seeing a flock to safe havens is that during the last FOMC meeting the fed indicated what could be construed as a dovish tone and brought the idea of more rate hikes than what was already expected to a halt. One last (and more recent as of this morning) reason to be bullish gold is that Trump has indicated he may veto a recent spending bill passed by the house that could potentially lead to a government shutdown!

The technicals of April gold look great for a bullish play. We saw an exact 50% retracement from the most recent low of 1242 back in mid-December, to the most recent high at the end of January at 1370. We now march toward the highs once again with 1360-1370 being strong resistance and 1300 being strong support and coinciding with the 200-day moving average. If this trade war is for real it could be just the beginning of a much larger upside move in gold.

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.