RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

There have been some recent dovish comments from Fed Chair Jerome Powell that indicated a potentially dovish outlook for the prospect of more interest rate hikes. He essentially said that he was aware of the economic declines internationally, and thus talked about the prospect of this affecting U.S. businesses who conduct most of their business overseas. This is quite interesting as this is the first time in quite some time that the Fed has essentially back tracked even slightly after the sell-off the U.S. equity market has seen. Feb gold has struggled to maintain any kind of rally as the prospect of interest rate hikes and continued strong U.S. economic data has put the U.S. Dollar Index in a more attractive position for investment as it is an interest-bearing asset.

February gold is currently trading up $9 at $1230, and although the market is still in a very sideways trend, the longer-term critical resistance level overhead for a breakout on Feb gold is 1252. If this level is taken out, the longer-term trend for gold is likely to march higher and run stops that fuel the rally in the process. Funds and the public have largely shrugged the precious metal in favor of riskier assets. Now that volatility has stepped into the picture as U.S. equities struggle for market direction, some investors are questioning just how strong the U.S. economy really is. If we are going to see another correction lower in equities (and oil for that), you could see gold post significant gains and push toward the psychological level of 1300 in a hurry.

Gold Feb ’19 Daily Chart

Gold Feb '19 Daily Chart

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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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