RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

August gold futures have been selling off just about the past month since June 15 with the break below 1280. I believe that gold will continue to selloff and test 1225 and possibly the all important 1200 level before a rebound could take place. There are several factors working against gold right now and they’re putting substantial pressure on the bulls. The first and most obvious has been the stellar economic data we’ve seen over the past few months. Jobless claims reported yesterday fell to a two month low of 214,000 vs expectations of 225,000 with unemployment at multi decade lows. The US dollar index’s strength has been another obvious reason for gold’s slide as the front month dollar contract once again marches toward the high of 95.255. Another factor is the resilient US equity markets, and a quite hawkish Fed (with the semi annual monetary policy report coming out today). The only thing the bulls can bank on right now is the trade war could likely get worse before it gets better.

Technically, the August gold contract has no reason to rally back to 1300. We would need closes above 1270 before any kind of bull case can be made. The trend is sharply lower and it’s likely to get worse as the lack of geopolitical issues and strength in emerging markets and our US economy gets stronger. Until we see the brake put on in gold it’s a continued sell.

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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