RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

There are several reasons behind the upward move in gold over the past several weeks. The first and most obvious is the North Korean tension that continues to rattle markets and investors alike. The potential for a full blown conflict seems to be gathering steam as the largest bomb ever developed by North Korea, and over 10 times more powerful than the Hiroshima, was exploded. We expect North Korea to continue to threaten the US and our Allies with additional tests to come. NK is reported to be launching a full range ICBM, with no trajectory changes, on the country’s founding day Saturday September 9. The escalation could be steep if they were to launch in the general direction of the United States or any allies. On top of this, we also saw the jobless claims number come out at 298,000 vs the 241,000 as the consensus. This number can be attributed mostly to the Hurricane Harvey impact with over 50,000 additional claims coming out of Texas alone. We expect this number to continue to rise in the coming weeks causing the Federal Reserve not to increase interest rates for the remainder of the year. Non-yielding assets like gold will continue to move higher should economic data come out that is lackluster or below trade expectations.

A technical perspective will clearly point to higher prices in gold. We continue to stay in a nice upward channel, but are now clearly in overbought territory. It’s blown through all resistance that investors have been watching such as 1,325 and 1,350. It appears that 1,400 is now clearly in the cards.


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.