RJO FuturesCast

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Metals

Gold to Finally Rally?

Posted 08/24/2018 9:04AM CT | Joshua Graves

December gold has had anything but a successful past few months. It’s been a stairstep down washout for the past several months. Most of this is due to several factors. One would be a lack of geopolitical tension in the world. North Korea and any number of our adversaries around the world have not provoked the US and have not done anything that would warrant a cause for war. We have seen stellar economic data out of the US, and on top of this the Federal Reserve has been quite hawkish over the past few months. The eyes will be on the Jackson Hole conference as we have a speech from Jerome Powell that could give us more details on the Fed’s monetary policy. Right now, we have a very high chance of at least two rate hikes before 2019. The first will come at the next Fed meeting with an almost certainty. The next will likely (75%) come at the December meeting rather than the November meeting. All of these factors put together have been weighing on gold. If we can sustain this recent pop above 1200, we could see gold finally find it’s footing and rally back above 1225. If we rally in December gold, it’s likely due to some sort of correction in stocks. It could also be from a pure technical short covering rally. Right now, we are sitting around the 1200 level on gold and it’s possible we trade between recent lows and 1225 for some time without a chance to the current landscape.

Gold Dec ’18 Daily Chart

Gold Dec '18 Daily Chart

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Joshua Graves

Senior Market Strategist
Josh began his career in May of 2013 after graduating from Purdue University, West Lafayette. He received a degree in Agricultural Economics, with a Certificate in Entrepreneurship. He started at Paragon Investments in Kansas, the heart of wheat country. While working there he developed long term relationships with corn, soybean, and wheat producers, speaking with them on a weekly basis. His goal was to market their physical production more effectively through tracking basis, as well as hedge their exposure in the grain and cattle markets through a variety of futures and option strategies. He then moved to Florida to work for PFL Petroleum, a physical biofuels brokerage, and gained significant exposure to OTC and physical energy markets. Trading has been a passion from day one of his career. In his free time he stays active in downtown Chicago, attends sporting events, and holds an FAA Private Pilot’s License and flies Cirrus and Cessna aircraft regularly.
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