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The two levels to watch in gold - RJO Futures Weekly Gold Outlook

Commentaries & Views

Weekly Gold Focus – Gold futures are continuing to disappoint on both sides of the trade and is in one of the most difficult chart patterns to participate in, so having a strategy and proper risk management is the key. Fundamentally gold faces the headwinds of a stronger U.S. Dollar and rising interest rates. The 10-year note yield reached the highest level since 2011 while the 30-year bond yield is at the highest level since 2014. With one of golds primary benefits being the safety of store of value, bonds have been attracting the bulk of the investment due to higher yields. Gold should start to attract the attention of the bulls once equities start to fall causing a ripple effect and decline in yields. Your triggers to watch are the economic data scheduled to be released in the next few weeks, if you don’t have a calendar of economic releases I can send you a commentary one through the offer below. Secondly, you want to keep an eye on small cap stocks like the Russell 2000. Small caps tend to be the leading driver of the general market whether higher or lower. Last week we saw the Dow jones making new highs while the Russell 2000 was breaking, giving a clear red flag.  Both factors could play a role in golds next direction.

Now it’s important to be able to identify these types of events and be able to come up with a strategy ahead of time. I always keep a commodity calendar and monitor RJO’s Market insights to stay on top of important global events. If you haven’t ordered a complimentary 2019 Hightower Commodity Trading Guide & Calendar, we will have some of these available to send out soon. This is your “go-to” resource for Government & Industry Report Dates, Futures and Options Expiration Dates and more than 350 charts and graphs. *Available to U.S. residents only.

You can request yours here:  2019 Hightower Commodity Guide

Daily Chart Analysis and Price Outlook

December Daily Gold Chart

December E-mini Russell 2000 Chart

The charts below are from provided by RJO Futures PRO, an exclusive and sophisticated online trading platform with integrated tools to seamlessly trade and monitor the markets.

Analysis and Outlook

The daily gold chart continues to show momentum indicators MACD crossing over into bearish territory while slow stochastics are in the in the middle of the range. This generally indicates sideways action and ADX which measures the strength of the trend is registering at 21. ADX levels under 30 indicate the trend is weak so swing and long-term traders would want to avoid this scenario and wait patiently. However, we all know that triggers and market conditions can change quickly so if the market breaks out on a closing basis over 1225 while ADX is over 30, stochastics are in overbought territory and MACD has turned higher, this could lead to a powerful move higher if the next session starts stronger. On the contrary if we see a close below 1180 while ADX is over 30, stochastics in oversold territory and MACD has turned lower, this could lead to another washout in prices if the next session opens weaker. Remember you can also use an option strategy to play this scenario as well.

If you would like assistance with technical analysis I highly recommend that you register for our new guide  Top 5 Technical Indicators for Futures Trading
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.