RJO FuturesCast

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Metals

Is April Gold Finally Going to Breakout?

Posted 03/23/2018 8:40AM CT | Joshua Graves

Gold has finally found its footing on what is an obvious slide in equities, and what could ignite into something much bigger than a tit for tat with China. Trump has fired what appears to be the first shots against China with a $60B tariff against all steel and aluminum products coming from China. They have retaliated in what looks like a restrained manner by imposing their own tariffs on $3B worth of US imports of fruit and wine. The much larger concern is that they have drawn a list of 128 products that are now potential targets of additional duties. Another reason we are seeing a flock to safe havens is that during the last FOMC meeting the fed indicated what could be construed as a dovish tone and brought the idea of more rate hikes than what was already expected to a halt. One last (and more recent as of this morning) reason to be bullish gold is that Trump has indicated he may veto a recent spending bill passed by the house that could potentially lead to a government shutdown!

The technicals of April gold look great for a bullish play. We saw an exact 50% retracement from the most recent low of 1242 back in mid-December, to the most recent high at the end of January at 1370. We now march toward the highs once again with 1360-1370 being strong resistance and 1300 being strong support and coinciding with the 200-day moving average. If this trade war is for real it could be just the beginning of a much larger upside move in gold.

Gold Apr ’18 Daily Chart

gold_apr18_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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