RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

April gold has appeared to establish itself as a safe haven asset after extreme amounts of volatility over the past week. When investors pushed stocks down to well over 1000 in the Dow, gold, actually fell in the biggest sell-off in one day since 2013. At one point it was down over $73! Despite this contrarian reaction gold is now reaching for the stars as we near $1700 on the front month April contract. As I stated in my past article on gold, investors should be using extreme caution in this market as panic seems to set in each day pushing gold volatility well beyond the norms. Options are now expensive, and for a reason. Gold going higher still needs to be the trade, but how you structure this is dependent on risk appetite.

There are a number of strategies that have low risk and moderate reward and give investors exposure to a market that could easily push toward all-time highs of $2000. Although I am not aggressively bullish just yet, anyone who says that “gold can’t go there or can’t trade like this forever” clearly has not been in futures trading for long. These are turbulent times and rather than sit on the sidelines, try options strategies or some of the smaller gold futures contracts (10, 33, 50, 100 OZ are available to trade) to get exposure during the corona virus epidemic.

Gold Apr ’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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