Gold Continues To March Higher

May 21, 2021 11:30 AM
Gold Market Update

Gold Market Update

The gold trade seems to be a little too easy recently, incrementally working its way higher since putting in a low of $1,677.30 on March 31st. Is gold finally behaving the way one would expect in an inflationary environment? Who cares? Go with the trend! 

Use the chart and track the U.S. Dollar. I fully expect the rally in gold to continue, even as I would expect that the Treasury yields in the 10-Year notes to rise. The shock of the sharp rise in rates is over. There’s been a necessary pause and much debate about rising rates and the prospects of inflation; inflation is real and gold likes inflation. Gold shouldn’t have too much difficulty breaking out above $1,900, especially as the Dollar looks capable of testing .8900.

So, yes, it looks like an easy trade right now. It’s a friendly trend. Remember the adage, “Don’t confuse a bull market for genius.” More importantly, remember to practice good risk management when trading commodity futures. Use options or stop loss orders. Work with a professional.

I’m bullish metals and commodities in general, as we have too many dollars chasing too few goods. Gold is assuming the leadership role once again. Keep it simple!

If you are interested in discussing the potential opportunities in the metals futures, contact me directly fcholly@rjofutures.com

Disclaimer: The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that R.J. O’Brien believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

About the Author

Frank Cholly has 35 years of commodity industry experience. He spent 20 years on the CBOT trading floor.