RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

June gold futures have been trading side by side with the equities for most of the big moves we’ve seen in gold recently. When the market is up big, gold seems to be right there with it. I have heard both sides of the argument for why gold is going to 2000 and why gold is going to underperform and stay below 1700 for most of this year. Gold I believe has the potential for a substantial rally above the recent high of 1790, but we need a close firmly above 1800 before that is possible. Traders should be looking at this with skepticism and think, everyone is thinking the same thing regarding the fed. Unlimited money printing with no end in sight, and inflation a real possibility long term. Now, let’s look at the bearish side of this which I would see as a big pullback in demand for gold from India and China specifically. They represent the vast majority of world gold consumption, and the World Gold Council last week announced it was projecting Indian gold demand to drop by 36% in Q3 this year. India is the worlds biggest buyer of gold hence why this is important to watch.

Technical aspects of June gold are mixed at best. Right now, the trade is watching a few key levels. One of which we appear to be at right now with support around 1690. The most important level to watch for the bulls is the recent high of around 1790. Unless this level specifically is taken out you can’t make a case for a bull run beyond that. There must be something new that develops to give the bulls a boost and a stock market selloff won’t do it. We’ve seen that before.

Gold Jun ’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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