RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

June Gold futures has seen quite the rally over the past few months. The question is how much more room does it have to go? Right now June gold trades at $1285/oz. It’s been as high as 1297.40 just last week. Most of this can be attributed to the geopolitical tensions overseas. The biggest potential for gold that I see at this point is the uncertainty surrounding North Korea. The leader of the country is a fanatic, who can be seen as completely unpredictable and speaks of constant nuclear threats against the United States. North Korea is a ticking time bomb that could have serious ramifications on the gold market. I think there is a real possibility that at the very least, a North Korean missile is shot down via a US guided missile destroyer. The retaliatory response from North Korea is likely to be minimal, but the perception of this could have investors flocking to gold. Gold could easily be seen at close to or even surpass 1350 over the next month if tensions continue to rise.

Taking a look at this from a technical perspective, everything seems to be supportive of the bulls. There are a number of reasons to support this. Gold is trading above all three main moving averages (50, 100, 200). If there is a pullback, 1262 is the first main support with the 200-day coming in right in line at this level. The MACD still indicates a buy, and has since March 21. The RSI is not into deep overbought territory right now either. There are a number of ways to play gold to the long side given the geopolitical tensions in the world, coupled with the supportive technical. 

Jun ’17 Gold Daily Chart

Jun '17 Gold 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.