RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

June gold futures have seen more volatility as the US equity market continues to grapple with trade uncertainties, geopolitical tension, and investors who see a weak global economy because of the trade war escalation. If you look at gold from a technical perspective, the trend lower that started from the peak in gold at 1356 has been broken as of May 13th, when gold moved above the trend line, however, appears to now be back beneath that line and continuing its move lower. A double bottom could be argued in late April when gold failed to make a sustained move beneath 1270. I believe that gold is likely to once again move toward that level if we do end up holding beneath the lower trend line. Look for smaller rallies to sell into and buying into small dips.

If you look at some catalysts that could move gold higher, the first and I would think most obvious would be a big stock market selloff. This would be enough to at the very minimum keep gold at its current level of 1280, and likely push gold above 1300 for the foreseeable future. Investors flock to safe haven assets such as gold in times of uncertainty. The most effective way of doing this is in gold futures, as gold etf’s do not offer the same liquidity, trading hours, or leverage that gold futures offer. The one headwind that will keep gold lower barring a major market event (think Iran war) is the incredibly strong US dollar index. If the US equities can survive this trade war, look for a resurgence of the dollar index, and this lower gold prices. If you would like more information on how to play gold, please contact me directly.

Gold Jun ’19 Daily Chart

Gold Jun '19 Daily Chart

Joshua Graves

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.