RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Gold traded at its lowest level in three months as the U.S. dollar tested highs for 2018 and Treasury yields climbed ahead of the Federal Reserve monetary policy decision tomorrow.  A rising U.S. dollar makes gold and other dollar denominated commodities more expensive for overseas buyers, while higher interest rates tend to boost Treasury yields, making raw materials less attractive. Gold for June delivery fell for the second consecutive session, 11.9000 or 0.9021% to 1307.30, the lowest level since late December. The precious metal has not found much support from recent reports by Israeli Prime Minister Netanyahu that Iran continued pursuing their nuclear weapons program, despite the nuclear agreement with the international community in 2015. The central bank is expected to be hawkish in tone as expectations for further rate hikes were heightened as a keys indicator of inflation, the Core Personal Consumption Expenditure Price Index hit the Fed’s target of 2% yesterday and the ISM Price Index released today was at its highest level since 2011. Although the U.S. dollar should find some support initially following the Fed Meeting, the greenback is near overbought levels and may pull back off its highs, which could bring some downward pressure off the precious metal. Gold has fallen near oversold levels with support coming in at the 200-day moving average of 1313.50 with the next downside target and key psychological level at 1300. A close below 1300 could extend deeper downside moves to 1287 and 1275 respectively. Resistance comes in around 1324 and 1332.

Gold Jun ’18 Daily Chart

Gold Jun '18 Daily Chart

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Alexander Turro

Market Strategist
Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.
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