Gold Still Stuck

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December gold futures saw yet another massive rejection this morning of the $1290 level. The deck has been stacked in favor of the gold bulls all week, with the U.S. Dollar getting crushed and an uptick in outside market volatility, yet it has been completely unable to muster any kind of sustainable bullish momentum. As much as we would like to favor the bull side, it is problematic when the market is constantly reminding us that so much more needs to go right for the bulls than the bears.

Chart from Investing.com

As $1290 remains the upside line in the sand level, $1265 is clearly that line in the sand level on the downside. We are not ready to completely throw in the towel on gold decoupling from the outside markets and volatility; so with volatility and fear near extreme lows, traders can look to the December options (expire November 27th) for a straddle, or strangle in hopes of a breakout or breakdown from the recent range. The risk/reward ratio is certainly in the option buyers favor here. Until the market shakes free one way or another, gold remains a brutally range bound trade.

Get your FREE 2017 Chart Book: Mid-Year Edition!

Get your free copy of the 2017 Commodity Chart Book: Mid-Year Edition from ADMIS. Updated July 2017 with new charts and commentary, Chart Book includes useful historical data, Open Interest and Volatility on 20 popular futures contracts, including Corn, Soybeans, Wheat, Gold, Crude Oil, the S&P 500 Index and more.

Download your complimentary copy today!

Questions or comments on this article, please contact Teddy at 312.242.7986 or via email at teddy.sloup@archerfinancials.com.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. Past results are not indicative of future results or performance. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.