December Gold futures have been absolutely crushed over the past month. Much of this can be attributed to a cooling off of North Korean tensions, along with quite positive economic data. The non-farm payroll number that was posted this morning has shown a loss of 33,000 jobs compared to a consensus of 100,000 jobs added. The fed did however, show a quite positive unemployment number of 4.2% compared to a consensus of 4.3% to 4.4%. At this point the fed is forecasting an 86% chance of a rate hike at the December FOMC meeting, which in theory should pressure safe haven investments like gold. Recent comments from President Trump have the market a bit spooked, as he said in front a group of pentagon military officials that this seemed to be “the calm before the storm” and you are seeing a bid come into gold this morning. Mainly from a mixed non-farm payroll report, and again talk of military responses to North Korea’s nuclear program.

If you look at gold from a technical perspective we need the brakes to be put on at current levels of 1263, which represents the 200 day moving average. December gold is clearly oversold at these levels, and in a very weak trending market. If 1263 can gold, we can expect at the very least a dead cat bounce back to 1285, and a possible run back to 1300. To turn the longer term trend we need a close above 1325 to confirm the change in trend. 


Dec ’17 Gold Daily Chart

Dec '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.