RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

December gold has seen quite the rally over the past few weeks. After a major selloff from contract highs, to coming right back down to the 200-day moving average of 1263, gold has been able to once again rally above 1300. It appears we are now going to be stuck in a trading range between 1250 and 1350 for the foreseeable future. Chinese imports of precious metals has been up for the past several weeks, and there have been some instances of talk of conflict out of North Korea. This is nothing out of the ordinary, however. We have seen imports of North Korean goods to China down 38% over the last month. Could this be attributed why North Korea has been quiet regarding missile and nuclear tests? North Korea had a founding holiday, the equivalent of our Independence Day holiday, on October 9. While everyone was expecting some sort of military or nuclear show of force, we saw nothing.

I think for gold to have real teeth above the 1325 level, we will need to see a ratcheting up of aggressive rhetoric from North Korea. A bigger reason behind the rally could be from President Trump announcing he will decertify the Iran Nuclear Deal. It’s expected to now be left up to congress if they want to stay in the deal. A look at the technical signals bullish price action with a close above 1300 today. A positive MACD cross as well as having the 200-day moving average lending support shows the strong technical. One thing to keep in mind is the ADX which measures strength of a trend, is quite low sitting at just 18 (a strong trending market sits at 40+). 


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.