RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

June Gold futures have been anything but a “safe haven” over the past month since the widespread outbreak of corona virus. I’ve heard every theory out there for why it’s not going up when there is an apocalypse going on in the equities. The most “rational” reason that I’ve heard and would to some extent agree with is the issue of clearing commodity and equity asset class exposure and meeting margin calls. Fleeing to cash in other words.  I would expect that after the extreme volatility that equities and gold have had over the past few weeks is here to stay.

This presents the question to anyone reading this article of how to profit off these uncertain times in gold. Investors should consider the everyday swings that gold has had with some days being as much as $150 from top tick to bottom tick. On a 100oz futures contract this is quite a lot to say the least. Investors interested in the precious metal should also look at the smaller, 10, 33, and 50 oz futures contracts to manage the swings with smaller accounts. Gold to me has more of a perception of a haven rather than being one and this move proves it in my opinion. The DOW has had several 2000 point plus selloffs in a single day recently and gold dropped severely with it each time, and trended lower as we continued lower in the equities.

Gold June ’20 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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