RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Feb gold has essentially seen consolidation sideways since the New Year’s trading began. It had its initial run up from the mid-December $1238 low. The question is, is there enough geopolitical turmoil and demand for gold that we could see another push toward early September highs of 1365? Let’s take a look at some positive fundamentals supporting gold right now. The most obvious is the very weak US dollar. It has recently collapsed to the lowest levels since September. Another supportive factor is the fact crude oil has pulled back even slightly this morning, yet gold continues to forge gains. This is clearly a supportive factor. A weaker than expected US PPI report, as well as an unexpected increase in unemployment claims rising by 11,000 are also supportive of the precious metal. Pressure could come into play with a clearly strong US economy, and hawkish minutes from the Dec 14th ECB meeting which was quite hawkish for ECB monetary policy. Another obvious, but less talked about factor was the North Koreans coming to the table to talk. This will most likely be a fruitless talk, but dialogue has started none the less.

A technical perspective reveals a healthy bull market, with the highest levels since September 15 being seen as I type. We had an initial run up, consolidation sideways, and now we are getting ready to make another move higher in my opinion. The MACD crossed indicating a buy when gold crossed 1265, and we have an ADX that is quite high indicating a strong uptrend.

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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