RJO FuturesCast

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Metals

Dec Gold, Look at Buying Dips

Posted 10/11/2019 9:10AM CT | Joshua Graves

December gold has seen this move before, and the main themes driving it higher still have not changed. This time shouldn’t be traded any differently. There are a few short term themes that are driving it lower and the clear and obvious reasons are the increased chances of a Brexit deal, and the optimism surrounding the U.S./China trade talks which are wrapping up today. I would look at the longer-term themes as the real issues to consider when considering a long position in gold. The central banks around the world have been buying gold at a much more aggressive pace over the past 12 months, with China and Russia leading the way to split from the U.S. dollar. The yield curve invertingm which has preceded the last 7 recessions, might be worrisome for investors and a flight to safe havens would make sense.

Technically, gold is having real trouble breaking the short-term trend which was drawn from the high to the most recent trend line resistance point at 1522. I would be a buyer of gold lightly in the 1475 area, and even more so around 1450, but this is in terms of the value as we are almost $100 off the recent yearly contract high. To confirm a gold turnaround though, we really need a break above 1530, and 1544 respectively. This would break above the short term down trend we have been in, and give more confidence to the bulls as the growing uncertainty over the economy grows. If you would like more information on how to trade gold weather over the short term or long term please contact me directly.

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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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