RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

December gold futures have been on the biggest run in over a decade as the market continues to seek alternative asset classes while the US dollar continues its slide. Gold should continue to see buying interest heavily on any dip (such as this morning’s $40 selloff) and is widely seen as a store of value. The government isn’t “even thinking about thinking about” raising rates as Jerome Powell put it, which leads investors to flee the greenback in search of better performers and yield. Gold is getting plenty of tailwind with the dollar in a tailspin and just recently touching a 2-year low. The biggest and most obvious driver of this rally is the unpreceded surge of “free” money from the treasury. Another stimulus is seen in the near future and this should once again continue to smack down the dollar and boost the shiny metal into new high territory once again. Traders should position themselves for heavy volatility as the average true range (or ATR) indicator is now at $45 from $25 just one month ago. This means that gold’s average move top to bottom on any given day is $45, or $4500 per futures contract. It should come to no surprise as traders gain confidence in a bull run and FOMO kicks into overdrive that volatility is here to stay. Fear and greed are the only thing that move markets and a 10 year high in the shiny metal, an endless printing press from the Fed, slumping US dollar index, and general search of performance should all keep gold well above $2000 for the foreseeable future.

Gold Dec ’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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