Gold trading outlook: futures lose ground before the September Fed Minutes

On Wednesday gold for delivery in December traded within the range of $1,143.00-$1,152.90. Futures closed at $1,149.00, rising 0.19% on a daily basis, while marking a fourth straight trading day of gains. Wednesdays high has been the highest level since September 24th, when the commodity went up as high as $1,155.90.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were losing 0.38% for the day to trade at $1,144.30 per troy ounce. The yellow metal overshot the lower range breakout level (S4), as it slipped as low as $1,140.00 earlier today. A break and close below S4 may drive the commodity down for a test of October 6th low of $1,136.30 per troy ounce.

FOMC Minutes

At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on September 16th-17th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.

As the Federal Reserve abstained from introducing a rate hike in September, and after the downbeat report on Non-farm Payrolls last Friday, expectations of a rate raise by the end of the year have been somewhat curbed. This was reflected in the four-day price surge of the yellow metal, as the latter tends to appreciate in value on the back of prospects that interest rates may be kept on hold and in times of risk aversion in general.

In September Federal Reserve president for Richmond, Jeffrey Lacker, was the only member to vote in favor of a 0.25% increase in the target range for the fed funds rate, while four others voted for postponing a rate hike until 2016. In June two members of the Committee supported the view of delaying a hike in borrowing costs until 2016.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for gold are presented as follows:

R1 – $1,149.91
R2 – $1,150.82
R3 (range resistance) – $1,151.72
R4 (range breakout) – $1,154.45

S1 – $1,148.09
S2 – $1,147.19
S3 (range support) – $1,146.28
S4 (range breakout) – $1,143.56

By using the traditional method of calculation, the weekly pivot levels for gold are presented as follows:

Central Pivot Point – $1,128.03
R1 – $1,150.27
R2 – $1,163.43
R3 – $1,185.67

S1 – $1,114.87
S2 – $1,092.63
S3 – $1,079.47