RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

February Gold has seen quite the pullback, but a recent bounce should give traders an opportunity to consider selling into. Let’s build the case for gold pulling back once more. The most recent economic data suggests that the economy is not only fine, but flourishing. Jobless claims, and business optimism suggests that there will be more of a flight from safe haven assets such as gold, and a push into more “risk on” assets. There is a slight bull edge recently with the Alabama election win for a Democratic senator suggesting that the edge in the Senate will make passage of any future laws that much harder for the GOP. This could potentially disrupt the massive run in equity markets over the past year. You are seeing minimal buying interest in gold as North Korea continues to pursue nuclear weapons, and rebuffing an attempt to “just come to the table” as Secretary of State Rex Tillerson has asked. It looks as if any hopes of a diplomatic solution are fading by the day. For the most part, the fundamentals all suggest flight from the precious metal over the next few weeks.

A technical perspective on gold will review a much murkier picture. We did bounce off minor support around the 1235 level, however, a retest of 1215 is much more likely than a bounce to 1280 where the 200-day moving average sits. There is not much in terms of support until we reach the July 10th level of 1214.50. Traders should be aware of this and average into the trade if they are looking to play a downside move. There are conservative ways to trade gold without using outright futures as well. For more information on how to trade gold, please contact me directly.

Gold Feb ’18 Daily Chart

Gold_Feb18_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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