RJO FuturesCast

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Metals

Dollar Strength Weighs Down on Gold

Posted 11/12/2018 10:59AM CT | Alexander Turro

Renewed strength in the U.S. dollar has continued to extend the downside move in the precious metal with the dollar trading at a 16-month high. Producer Price Index came in higher than expected on Friday with the largest increase in six years, which only provided further support for the U.S. dollar. This comes amid the release of the FOMC minutes which reaffirmed the Fed’s stance on tightening along with their odds of a rate hike in December. In a longer term outlook, gold ETF’s increased their holdings by $1 billion in October. While the precious metal is likely to remain under pressure through the December rate hike window, the market is near oversold levels and may catch a bid as an inflationary hedge. The next downside target can be observed around 1195 with the possibly of a retest of the September consolidation lows. Near term resistance comes in around 1215.

Gold Dec ’18 Daily Chart

Gold Dec '18 Daily Chart

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Alexander Turro

Market Strategist
Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.
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