RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

June Gold has seen substantial volatility over the past few weeks with today being no exception. June gold has seen a very specific trading range in this timeframe, but the size of the moves proves the precious metal is still very much followed closely. The current fundamentals of gold clearly point to much more bullish price action as the talks of a trade war with China become more and more likely. Yesterday, President Trump announced he would ask the state department to prepare an additional $100B in additional tariffs, to which China has responded it will fight the US trade war “to the end” with its own retaliation of $100B in additional sanctions. These are clearly very bold statements and actions from both sides. Another more recent reason to be fundamentally bullish gold (in the near-term) is the weak economic data from the US non-farm payrolls out this morning. The data showed 103,000 jobs added vs a trade expectation of 175—193,000. This is a clear flop and gold is up close to $10 on the news. A key for gold’s price action over the next week or so will be Fed Chair Powell in his speech in Chicago today about whether the potential trade war with China and recent stock market volatility will cause the Fed to rethink its current rate hike plans. When the Fed raises interest rates (100% rate hike discount in the next June meeting) it puts pressure on the safe-haven asset and boosts the US dollar index as it becomes a better investment.

The technical look for gold doesn’t point to any direction, but more of a range bound market. This is a great market to use options with as the volatility has increased the prices and there are very clear support and resistance areas.

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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