Gold trading outlook: futures edge lower as data eyed

Gold futures were slightly lower during morning trade in Europe today, as investors look to square positions ahead of key US and Eurozone data this week. A keenly awaited ECB meeting could produce an even more dovish stance for the euro, which would boost the dollar and pressure commodities.

Gold futures for December delivery on the Comex in New York traded at $1 216.7 per troy ounce by 8:09 GMT, down 0.17%. Prices ranged from $1 215.4 to $1 219.5 per troy ounce. The contract added 0.28% on Monday.

Silver for December delivery stood for 0.42% daily drop, and still near a four-year low, at $17.493 per troy ounce. Meanwhile, palladium dropped 0.27% to trade at $787.40 and October platinum was down 0.09% at $1 308.30.

Investors The Conference Board’s US consumer confidence index is expected to log a minor increase at 92.5, the highest in at least six years. Meanwhile, key unemployment and CPI figures are awaited from the Eurozone. The unemployment rate is forecast to be unchanged at 11.5%, while consumer inflation is projected to further drop to 0.3% on an annual basis, the lowest level almost five years.

More importantly, crucial employment data from the US on Friday and a key European Central Bank (ECB) meeting are on investors scope, as the dollars looks set to post its best monthly performance in well over a year.

Upbeat data from the US and weak figures from the Eurozone both boost the US dollar, which in turn weighs on dollar-denominated commodities, such as gold. The greenback reached a four-year high against a complex of other major currencies yesterday, extending the upward trend and pressuring commodities across.

“The divergence in monetary policies between the Fed and other central banks will further push up the dollar and weigh on gold,” Zhu Runyu, an analyst at CITICS Futures Co., said for Bloomberg. “As geopolitical tensions fade, gold has also lost a key price support this year.”

Technical support and resistance levels

According to Binary Tribune’s daily analysis, December gold’s central pivot point on the COMEX stands at $1 219.3. In case futures manage to breach the first resistance level at $1 223.4, the contract will probably continue up to test $1 227.9. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 232.0.

If the contract manages to breach the first key support at $1 214.8, it will probably continue to slide and test $1 210.7. With this second key support broken, the movement to the downside may extend to $1 206.2.

Do you think gold will break below the key $1 200 resistance?

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