RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

After bottoming in later December, the gold market has done well to gather itself and begin regaining some lost ground from the July ’16 swing high.  The market has built solid positive structure coming out of the Dec low and yesterday’s close produced the first close above the 200-day SMA since November 7 2016.  With prices now trading above both the 50 and 200 day SMA, precious metals traders appear optimistic that the recent strength in gold is here to stay.

This optimism in gold prices comes amid heightened geopolitical risk stemming from military action in Syria.  Global tensions appear to be escalating and gold has historically been the recipient of increased buying interest in times of geopolitical uncertainty.  Gold as a “safe haven” asset appears to be in agreement with the near-term technical action on the Jun’17 daily chart, both of which paint a strong argument for higher prices. 

While a cross above the 200-day is certainly a promising signal, it doesn’t comes without caution a descending trendline originating from the July’16 swing high will likely come into play around the 1300-1308 area.  Structural resistance from the early November peaks can be seen at 1318.7 and participants should be cognizant of the potential resistance area from 1290 – 1318.  Initial support comes by way of a Fibonacci confluence zone from 1225 – 1230 and the near-term positive bias remains in effect above the 1198.0 swing low in March.


May Gold Daily Chart

Erik Tatje