Which Direction Will the Gold Market Go?

June 8, 2018 9:21AM CDT

In the early morning trade, gold is ever so slightly trading down today and currently trading at $1,302.7. Gold has remained in a back and forth three-week trading range and looks like it’s prone to break out in either direction. August gold is hanging in there quit well this morning even with the US dollar trading higher overnight. Some could say gold is losing its role as a safe-haven to silver, which also has more physical demand than gold. Gold might be trading in this tight trading range until after the June 12 summit with North Korea as investors and traders alike passionately await an outcome. Furthermore, the negative rhetoric from some G-7 leaders that they aren’t happy with the Trump admiration’s unfair trade practices talk against the United States can also be holding this gold market up in the midst of a stronger dollar.

Let’s take a quick look at the daily August gold chart, which is interesting. It looks like the 50-day MAV is trying to cross below the 200-day, which would mean a bearish death cross pattern has formed and is a very strong indicator for a big and further selloff in the market will accrue. However, the 50-day is starting to level off instead of sloping down, which means if this pattern fails, then a big momentum rally will occur. Furthermore, gold looks like it is slowly trending above a bearish trend line which I highlighted below, and the case can be made with the right factors coming into play that gold is ready to take off to the upside. However, I think the next major move might have to wait until the June 12 summit is over.

Gold Aug '18 Daily Chart

Gold Aug '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.