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Gold futures have battled valiantly at and above $2000 per ounce over the last month, but a failed breakout, creating a triple top within range of the 2020 record high of 2089 cannot be ignored in the near term.

While recognizing technical resistance is essential, one must also forecast fundamental hurdles.  The CME Group Fed Watch tool uses the price of Fed Fund futures to calculate probabilities in which the Federal Reserve may hike or cut rates. The current landscape signals only a 20% chance the bank hikes rates another 25bps at its next meeting on June 14th. With Nonfarm Payrolls and CPI for May due ahead of the meeting in June, coupled with the Fed's tightening trend, there are risks those odds increase.

It would elevate the U.S. Dollar and rates if this were the case. Strength within each traditionally acts as a headwind to Gold. 

Furthermore, Fed Fund futures are pricing in 50bps worth of rate cuts from the current level of 5%. In recent weeks, and despite banking stress, the Federal Reserve has broadly stuck to its narrative that there will be no rate cuts in 2023. 

As the landscape plays out and these odds adjust, Gold will be susceptible to swings, but opportunity lies within divergences of these probabilities. 

 

 

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC 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. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC 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. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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