Looking to the Futures

Gold is up over 4% for the month and continues the climb as investors face a variety of uncertainties in the market right now. Since the Federal Reserve cut rates 25 basis points on September 17th, Gold futures have moved up by over 9% and the probability of future rate cuts will continue to fan the demand in the product. On Thursday, minutes from the last Fed meeting will be released and Federal Reserve Chairman Jerome Powell will speak at an event for the Wall Street Journal, focusing on the potential impact of a government shutdown on the economy and the Fed's policy decisions. 

Silver Futures, another commodity that has benefited from the flock to safe-haven assets and has outperformed Gold Futures year-to-date. Gold for the year is up over 51%, while Silver Futures are up 62.14% for the year. With higher probabilities of lowering interest rates, historically this is bullish for metals as short term treasuries become less attractive to investors. Markets are currently pricing in a 95.7% probability of another 25-basis point rate cut in October, and investors will be listening for more dovish commentary that would support future rate cuts. Federal Reserve Governor Stephen Miran spoke at an event held by the Managed Funds Association in New York on Tuesday said the U.S. bond market's current relative calm supports a swift push to lower interest rates. Miran also supported a 50-basis point rate cut at the September Federal Open Market Committee meeting.

Uncertainty from the government shutdown has yet to slow down the equity markets thus far but will pose a greater risk to sentiment the longer the shutdown drags out. Economic data has been delayed due to the shutdown and federal workers are being furloughed, working without pay, and potentially facing sweeping layoffs. Further driving demand for gold, central banks around the world are adding to their gold stockpile amid uncertainty from tariff and the ongoing conflicts in Gaza and Ukraine. China's central bank added to its gold reserves in September marking 11 straight months of increasing its reserves.

December Gold futures (/GCZ25) settled Tuesday 4004.4 up $28.1per troy ounce or .70% higher for the day. Gold is well above the 9- and 50-day simple moving average and the 21-day exponential average. The 9-day simple moving average last bounced off support August 21st and steadily diverged between the 9-day simple moving average and the 21-day exponential moving average. 

The highlighted area on the price chart focuses on when the 9-day simple moving starts to dip below the 21-day moving average before accelerating. On the Volume Average lower study, the same timeframe is highlighted and note that over the course of the strong uptrend, volume has consistently been higher than the 50-day average of 202,025 contracts traded. 

The 14-day RSI is 82.731 currently well above overbought levels signaling the significant buying pressure on the product. The highlighted area on the RSI lower study starts on August 28th when the RSI initially crosses over the 70 RSI level and has since been able to ride that level as support up to this point.
 

MBA Mortgage Applications  7:00 AM ET
Fed’s Musalem Speaks  9:20 AM ET
Fed’s Barr Speaks  9:30 AM ET
Oil Inventories  10:30 AM ET
10-Year Note Auction  1:00 PM ET
FOMC Minutes  2:00 PM ET
Fed’s Kashkari Speaks  3:15 & 4:30 PM ET
Fed’s Barr Speaks  5:45 PM ET
 

New futures products are available to trade with a futures-approved account on all thinkorswim platforms: 

• Ripple (/XRP)
• Micro Ripple (/MXP)
• Micro Corn (/MZC)
• Micro Wheat (/MZW)
• Micro Soybean (/MZS)
• Micro Soybean Oil Futures (/MZL)
• Micro Soybean Meal Futures (/MZM)
• 1 OZ Gold (/1OZ)
• Solana (/SOL)
• Micro Solana (/MSL)

Visit the Schwab.com Futures Markets page to explore the wide variety of futures contracts available for trading through Charles Schwab Futures and Forex LLC.