Gold trading outlook: futures resume the slide as markets await the US employment numbers

On Thursday gold for delivery in February traded within the range of $1,045.40-$1,064.50. Futures closed at $1,062.40, surging 0.78% on a daily basis. It has been the first gain in the past three trading days. The daily low has been the lowest price level since February 5th 2010, when the commodity went down as low as $1,045.20.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in February were losing 0.05% on Friday to trade at $1,060.70 per troy ounce. The precious metal slid as low as $1,057.20 earlier today, overshooting the range support level (S3). Short-term support may be received in the area around the low from December 3rd ($1,045.40), while resistance may be encountered at the high from December 1st ($1,074.60). The latter is also in proximity to the 23.60% Fibonacci level, reflecting the descent from October 28th high to December 3rd low.

Yesterday the yellow metal gained ground on the back of a weaker US dollar, after the European Central Bank left its key refinancing rate unchanged at a record low 0.05%, but reduced the deposit facility rate to -0.30% from -0.20% previously. The Governing Council also left the monthly pace of asset purchases intact at EUR 60 billion and extended the programs period. This decision came as a disappointment to market players, as expectations pointed that the Bank would expand the scale of monthly purchases.

Later on Thursday the greenback managed to trim earlier losses, after the Fed Chair Janet Yellen noted during a testimony before Congress that policy makers would probably vote in favor of raising the target range for the federal funds rate at the upcoming policy meeting on December 15th-16th. According to Yellen, economic growth is expected to be strong enough in order to further boost employment and send annual consumer inflation back up to the 2% objective. In addition, economic and financial information, which has been received since the Fed meeting in October, has been consistent with projections.

Today gold trading may be strongly influenced by the key employment data, scheduled to be released out of the United States. Employers in all sectors of economy in the United States, excluding the farming industry, probably added 200 000 new jobs in November, according to the median forecast by experts, after a job gain of 271 000 in October. The latter has been the highest job growth since May 2015, when 280 000 new job positions were added. At the same time, the rate of unemployment in the country probably remained at 5.0% for a second consecutive month in November, according to expectations. It has been the lowest level since April 2008, when a rate of 5.0% was reported. In case of a larger-than-expected gain in jobs and a further drop in US unemployment in November, demand for the US dollar would be strongly supported. Such a scenario will certainly mount selling pressure on the yellow metal. The Bureau of Labor Statistics will publish the official employment report at 13:30 GMT.

Daily and Weekly Pivot Levels

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

R1 – $1,064.09
R2 – $1,065.77
R3 (range resistance) – $1,067.46
R4 (range breakout) – $1,072.52

S1 – $1,060.71
S2 – $1,059.03
S3 (range support) – $1,057.34
S4 (range breakout) – $1,052.28

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

Central Pivot Point – $1,062.23
R1 – $1,073.37
R2 – $1,090.53
R3 – $1,101.67

S1 – $1,045.07
S2 – $1,033.93
S3 – $1,016.77