RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Gold has been quite strong over the past few weeks given the firm US economic data that has come out. There have obviously been several very unfortunate external events that have helped put a bid into gold as well, such as the Manchester attack. Today, we have seen gold find much needed support as some very weak US Non-Farm Payroll data has been reported this morning. This is confirms unemployment is at a 17 year low. Right now the unemployment rate sits at 4.3%, down from 4.4%. This is suggesting a number below 4% over the coming months. Still, if core inflation remains below the Fed’s target we will continue to see interest rates rise, again putting fundamental pressure on gold. US Equities are at all-time highs, and today’s non-farm payroll number is giving everyone a reason to start guessing if this is the top and a chance for gold to shine. August gold is currently trading up $6.50 at $1276. It’s at a level we have not seen since the end of April. Gold still has the potential to have an explosive upside move with a North Korea threat still looming as Japan and the US conduct large scale drills with 2 US aircraft carriers now operating in the region.

If we look at gold from a technical standpoint, everything points to higher prices. The only caveat is that with the last few trading sessions, volume has not been strong on the moves. It’s a concern as any move up or down should be accompanied by strong volume for confirmation. We are, however, trading above all three main moving averages, not in overbought territory (yet) and continue to trend upward since the May 9 low. Look for a break below 1260 as the first sign of weakness in gold, followed by a much stronger confirmation with a close beneath 1248.

Aug ’17 Gold Daily Chart

Aug '17 Gold 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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