A storm is coming in the equities markets and the first sign of a equity rain cloud is the death cross that is hanging over the Russell 2000. This occurs when the 50-day moving average (DMA) crosses below the 200 DMA to the downside (see chart below). I believe a break in the equities could be the catalyst that pushes gold through $1246/oz and powers it up to the 200 DMA at $1276/oz. Now recently several Fed officials have changed their tone to a more dovish stance. This is a result of the softening housing data from their over tightening in interest rates. While I expect the Fed to raise rates in December, this should lead them to disappoint in 2019. 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.
Daily Chart Analysis and Price Outlook
December E-mini Russell 2000 Chart
December Daily Gold Chart
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Analysis and Outlook
Looking at the daily December gold chart which has been mostly trapped in a trading range for the last 4 months, needs a catalyst to break through the $1246/oz. What you want to see is stochastics push up over 75 while the MACD is positive. In addition, you would need the ADX (which measures strength of the trend) to break up above 25. This combination should provide gold with the technical setup to challenge the 200 DMA.