RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

December gold futures have had anything but a calm price action the past few months, and the gradual trend is sideways to lower. Look for gold futures to continue chopping sideways to lower. Traders should be at this point focusing on two real factors and they are quite easy to understand. The first is the fundamental aspect of a stimulus bill or fed commentary that might drive the direction of gold to the upside. $1.8T is no small amount of money, double the 08 bailout to be exact, which would more likely than not drive gold back above $2000. The second factor is technical and it’s simply looking at the breakout point on the upside for a break in the lower trend we’ve been in for months. This level comes out at the 1940-1950 level, which I would think a few days of closing in this area allows traders to again step in and buy gold futures. This is not something I would be buying into until this happens. Everyone trading gold has their own theory based on fundamentals, and quite frankly nobody knows where it’s going except the managed money. If traders want to smartly trade gold they would wait for a breakout to the upside before buying and continue to trade with the trend; sounds familiar doesn’t it? The margin increases from the CME on gold futures sit around $12,000 on a full 100 oz contract, so traders should be prepared for bigger swings and if not need to utilize options instead, to which we can assist in strategy development.

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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