RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

August gold futures have seen much increased volatility over the past few trading sessions. We saw a $25 rally on the precious metal Wednesday following the recent turmoil in the Trump Administration. Investors flocked to gold and other safe haven assets, as the thought of an impeachment or presidential investigation seems like a possibility. Although highly unlikely, this was a reason for gold bulls to push the market higher. August gold formed what is known as a “golden cross” when a commodity crosses it’s 200 day moving average in a bullish manner. Fundamentally gold will still face headwinds if it expects to sustain this move. We have had fantastic jobless claims numbers here in the US, UK retail sales, and Philly Fed survey all posting better than expected. The other side to this argument is the still looming, and very real threat of a military conflict somewhere in the world, most likely North Korea. A second aircraft, the USS Ronald Reagan, has been dispatched to the Korean Peninsula. A full blown conflict would surely send gold soaring, and it’s in the back of everyone’s mind as a possibility in the coming months following another North Korean nuclear test.

 

Technically, gold has turned bullish. It’s trading above it’s 100, and 200 day moving averages. It’s also following a nice short term uptrend from May 11. A close beneath 1247 would trigger more selling, and a breakdown in the buying. The MACD has turned positive, indicating a buy signal. Look for a test of the 1247 trend line, followed by a test of the 38% retracement at 1238 if we do break this level. Gold bulls should have a target to sell following entry around 1250, at 1275. This represents fairly strong resistance overhead.

 

Aug ’17 Gold Daily Chart

Aug '17 Gold 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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