RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

August gold futures have had an incredible run on a chart that looked sickly until the last week of trading! Gold has moved higher seven of the last trading sessions in a row. It’s a quite impressive rally to say the least moving from the 1280 level to well above 1340 and now at mid-February highs. The break in the US dollar is helping support more of a bull case for gold as well. If you look at gold from the big picture, look at the overall worry and negative sentiment that is in the market. Most traders believe that the US equity market is solid but worry about a prolonged trade war and its drag on the economy. They worry that it’s going to get worse and if nothing else owning the precious metal is better than simply pulling from their 401k and stock accounts. US stock ETF’s shed a near record $20B from exchange traded funds in May, which is a clear sign of the worries ahead. Moving forward, if the Fed does in fact cut rates, and we start to see weaker economic data such as the big miss in the non-farm payrolls today at 75,000 vs 180,000 expected, it could reinforce the bull case for gold.

The chart pattern for August gold does look like it could come to the top and stall out, and investors need to watch for a new contract high being made before putting more into the precious metal. The level to watch is 1361.50. If we were to break out above this level look for an accelerated move up to 1400. There are calculated risk plays to position yourself for this move with futures, options, and a combination of the two.

Gold Aug ’19 Daily Chart

Gold Aug '19 Daily Chart

Joshua Graves

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.