RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Feb gold futures have jumped significantly off the recent lows, but this is simply a trap in my opinion that is fooling traders into thinking this rally is for real. Could it be real? Yes, the answer is absolutely but not likely. There is always a calling card for big reversals in any commodity market. Volume is the single most significant indicator that managed money types simply can’t hide. If you look at the volume when gold recently hit 1767, the daily moves downward showed volume exceeding two times the daily average of 245,000 futures contracts. This to me shows confidence in a move lower. Gold moved well off those upper 1700 lows in short order, but on volume that still today has not once even hit the average trade volume. There were multiple days where volume was lucky to hit 130,000 contracts traded. Fundamentals of gold are not really something to follow right now as it seems whichever way the wind blows in the news that day is considered a “fundamental.” We will likely get stimulus at some point in the next month or so, and that’s already been priced into gold in my opinion. It’s a supportive factor don’t get me wrong as it’s a boost for inflation, but it’s not something I’m going to sit back and trade day to day on. Traders should be watching gold for a long only if can take out 1900 and get a close above 1915.

Gold Feb ’21 Daily Chart
800-438-4805312-373-5383Series 3 Licensed

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.
Read More