RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

June gold has had just about every reason in the world to bust above $1700 and stay there for good. If we look at the fundamentals of why we might be seeing a rally, take your pick of the most recent horrendous economic data. We should have seen a flight to the supposed “safe haven.” Massive job losses, massive unemployment claims, all levels we have never seen before. It’s a broken market in my opinion. There are clearly other factors driving the gold sell-off. I’ve looked at the reasons to be bullish and the reasons to be bearish, and yet gold is for the most part sideways, but volatile. I think traders at this point need to stop asking the question I get asked the most, “why is gold going down when stocks are crashing?” My answer is simple, because markets can remain irrational longer than you and I can remain solvent. People just want out, clearing the books and going to cash it makes sense.

Traders need to take the fundamental playbook and throw it out the window in this volatile environment where headlines and rumors drive massive intraday swings for no good reason. The most important thing I see in gold is the lack of volume over the past week. Average volume traded in June gold futures is 436,000 contracts. We have traded less than half of that every day. This tells me that any move needs to be taken with a grain of salt. Don’t bet the farm on a big move up or down without big volume trending higher behind it. A classic head and shoulders pattern is clearly shown on a daily chart, and right now gold needs to take out the highs over $1700 for me to get bullish firmly. If you would like strategies made for gold trading with limited risk, contact me directly.

Gold Jun ’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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