Full Article: How high will Gold Go? – RJO Futures Weekly Gold Outlook
By Phillip Streible
Weekly Gold Focus – Gold futures will continue to keep an eye on President Trump’s policy changes, the FOMC meeting and the intensity of the liquidation in equity markets. It seems that each one of these developments is domino effect of the next. If you look at the markets initial reaction to Trump’s victory it really started to price into faster growth and inflation with 10-year yields rising faster than the short dated. How the FED may react to this is still in question. If they try and combat inflation growth by raising rates aggressively this could cause the selloff in equities to accelerate. This leads us into looking into the macro picture…
Important Global Events for the Week
On Friday February 3rd we will get the Nonfarm payrolls report where the Dec. previous number was 156,000 and Jan expected is 170,000. Now it’s important to keep an eye on the previous month to see if any big revisions happen. This could easily sway the markets just as much as the headline Jan number.
Of the more interesting developments that I have been watching in the gold this week has been the concept of “open interest”. Open interest is defined as the total number of futures or options contracts of a given commodity that have not yet been offset by an opposite futures or options transaction nor fulfilled by delivery of the commodity or option exercise. Each open transaction has a buyer and a seller, but for calculation of open interest, only one side of the contract is counted. I will get into why I was analyzing Open Interest below.
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