RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

February gold futures seemed to show some life over the past week with volatility in the stock market once again picking up; It was short lived. This morning’s blowout, incredibly positive non-farm payrolls number indicated 266,000 jobs were added vs the expectations for 188,000. This was coupled with a very positive 3.5% unemployment rate, vs expectations of 3.6%. Despite the recent stock market jolt the economy of the U.S. is still quite healthy, and the data supports this. Gold is down over $16 this morning coming back toward its recent lows in November of $1460. I would not be a buyer of gold in any way at least in the short-term.

Technically, gold is still stair stepping its way down and following a very gradual downtrend it’s been in since highs posted back in early September. The way Feb gold is trading right now, it wants to settle back in the low to mid 1400’s and what I think is going to be a trade down to $1450. There are plenty of reasons to be bearish with all of the positive economic data, and technicals to support. There are only a few reasons to be bullish. The most obvious is a trade war escalation on December 15th, with tariffs increasing on an additional $156B in Chinese goods. This could absolutely trigger a stock market selloff similar to what we had in December of last year. If this is the case, look for gold to bounce back toward $1500, but beware this level as follow through is needed above $1500 to warrant a long position in gold.

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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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