RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Metals

June Gold, Is the Bull Party Over?

Posted 05/04/2018 9:26AM CT | Joshua Graves

We’ve finally seen the gold market break out of the recent trading range it’s been in for the past several months. Fundamentally, this is due to several different factors. The first and most obvious reason is a much stronger US dollar. There are no signs that the DXE is going to slow down. With four rate hikes now forecast at a coin flip, and decently strong economic data that seems to be coming out week after week. The North Korean peninsula is now in a very real and likely position for peace, something that was unheard of just a few weeks ago. It appears that maximum pressure through sanctions and military strength has brought the Kim regime to it’s knees. We are far from out of the woods on this, but something that could heat up again is the Iran nuclear program should the US choose to leave the deal. This appears more likely than not, but North Korea peace was far more unexpected and caught gold bulls off guard.

A technical look at gold does show that once again, the psychological and technically important level of 1300 has held for now. The bearish technical that shows longer term trouble for gold is the break beneath the 200-day moving average. There is still hope for remaining long, but we really need a hold of 1300 for the moment. If we hold this area the downside is minimal, and another test of the highs could be in order.

Gold Jun ’18 Daily Chart

Gold Jun '18 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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