RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

August gold futures have been fairly quiet over the last several weeks. This comes just after we saw a $30+ selloff on May 15, and it’s likely to continue. If we look at the fundamentals we continue to see positive jobs data with this morning’s non-farm payrolls showing a major beat of 223,000 which was higher than the consensus of 190,000 and over the high estimate of 220,000. In my opinion, the Fed is still a coin flip from another rate high at the June meeting, and more positive data and stock market price action is needed to bring this to 100%. The North Korean situation is not adding anything to the bull argument with the June 12 summit more and more likely now that their top military spy chief is in New York to salvage a meeting. We’ve seen a bullish fundamental develop with the turmoil in their economy and as a result Italian bond yields spiked, leading to a flight to safe haven US treasuries gold included.

The technicals point to lower prices as well. Gold seems to be forming bear flags and stair stepping its way down toward the mid 1200’s. Look for another selloff toward the 1260 level as the last area of support. I would expect this to come as the USD rises over the next few weeks, especially if we get confirmation of an additional rate hike at the June meeting. Look for a near-term selloff to 1275, followed by the flag forming with recovery to 1285 over the next week or two. 

Gold Aug ’18 Daily Chart

Gold Aug '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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