Last week, the price of gold futures rallied to the 1259-1260 level. This is the highest it has been since June 15. The stock indices had sold off enough that investors were again looking for gold as a safe haven.

Today’s action suggests that the flight to quality was temporary and short lived. Why? The markets are looking for more positive news out of the government data due out this week. This is also reflected in the positive bounce in the US dollar and the stock indices. This alone has seemed to turn the gold market. In addition, there are reports of a previously closed gold mine in South Africa that  will be reopening along with the news that Chinese gold imports have fallen 40% in May. According to the Commitment of Traders report, the net long position by speculators has been reduced suggesting that longs took profits after last week’s rally. You may want to look at your options should the August Gold fall below 1241.90. The turning point back to the upside does not come in until new highs are made on a close above 1268.50 which was the intra-day high on June 15.

Aug ’17 Gold Daily Chart

Aug '17 Gold Daily Chart

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Laura Taylor

Senior Market Strategist

Laura began her career in the financial industry in 1981. In 1985 Laura and some former colleagues developed and organized a new IB division at Index Futures Group. With a partner, she named the division (Brokers Resource Corp.), developed the client base and supervised a staff that serviced guaranteed and non-guaranteed IBs located across the country. She developed the in-house procedures manual and conducted on-site compliance audits. I was also one of the original co-founders of the National IB Association (NIBA) and hosted the very first NIBA conference in Chicago. After Index Futures Group sold their IB division Laura stayed on to manage the new accounts department as vice president of operations and then became their director of compliance. In 1996, as part of ED&F Man, Laura decided to venture into a new role in the commodity industry by putting her AP license to work by developing a client base as a commodities broker. Laura joined RJO Futures in 2011 where she enjoys being a senior commodities broker assisting clients with their trading decisions, the execution of their trades and specializing in automated trading for newsletter and hotline subscribers.

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