RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The gold market has started the Wednesday trade off balance in direct response to a bounce in the dollar and a recovery in overnight global equities. While the geopolitical headline flow from the North Korea situation has been relatively calm overnight, a photo released from the Korean Central News agency today showing the North Korean leader laughing along with his military advisers was also accompanied by promises of more tests with an ultimate goal to “contain Guam”. Therefore, gold might see a bounce here today, but we are seeing some corrective action due to a stronger dollar and an overreaction to a missile bring fired over Japan on Monday.

The bear camp could suggest that the gold market was initially unable to hold the impressive gains we saw on the charts the past couple days perhaps because the US response to the North Korea launch was overdone and the comments that followed created a “buy the rumor sell the fact” knee jerk reaction. Lastly, the bear camp might suggest that the speculative fervor toward gold and silver at least temporarily reached an excessive level. The world’s largest ETF saw their holdings rise by 2.07 tonnes on Tuesday and reach their highest level since July 18. 

DECEMBER COMEX GOLD: From a technical standpoint, studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The market’s short-term trend is positive on the close above the 9-day moving average. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 1324.6 and 1338.9, while first support hits today at 1303.4 and below there at 1296.4.

Dec ’17 Gold Daily Chart

Dec '17 Gold Daily Chart

Manon Lasserre