RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Metals

February Gold, Get Ready for $1400

Posted 01/04/2019 8:07AM CT | Joshua Graves

The gold market continues to catch a bid from a plethora of outside bullish news. In short, you have extreme volatility in the U.S. equity markets, weak manufacturing data out of China, and a much weaker U.S. dollar that continues to look toppy. This morning, the U.S. non-farm payroll number showed a blowout 312,000 jobs created vs 176,000 created and the Dow is currently up around 300. Even if U.S. equities do march higher, it’s likely that gold will be unphased on its move higher as market sentiment in general shows a clear “risk off” mentality.

From a technical perspective, February gold did in fact move up past 1300 this morning as it hit a high of 1300.4. The next major area of gold’s willingness to move higher is around 1325. This is where we spent about a month back in the May/June time frame. The trend is still clearly up, and always remember “overbought” and “oversold” mean nothing, as markets can remain in both for months, even years at a time. Just because gold has rallied $100 since mid-November doesn’t mean it can’t go right through 1300 all the way to 1400. In my opinion, it’s likely to have a little more chop on the march to that level, but the biggest push from a macro-economic perspective is going to be U.S. tariffs biting the Chinese economy and slowing their economic growth which in turn stokes a push into safe havens such as gold.

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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