Gold trading outlook: futures retreat to 1-month lows ahead of US production data, Fed outlook weighs

On Wednesday gold for delivery in April traded within the range of $1,218.60-$1,247.70. Futures closed at $1,222.30, plummeting 2.07% on a daily basis. It has been the 19th drop in the past 38 trading days and also the sharpest one since February 15th. The daily low has been an exact test of the low from February 29th. Gold has lost 1.54% of its value so far during the current month.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in April were losing 0.55% on Thursday to trade at $1,215.60 per troy ounce. The precious metal went down as low as $1,212.90 during the early phase of the European trading session, while the current daily high was at $1,223.50 per troy ounce, recorded during early Asian trade.

On Wednesday the yellow metal was pressured by renewed prospects of a rate hike by the Fed, after the Federal Reserve President for Philadelphia, Patrick Harker, expressed his support of a more hawkish approach regarding policy. “I think we need to get on with it,” Harker told bond traders on Tuesday at the Money Marketeers of New York Universitys conference on Growth and the Role of Economic Policies, “I am not a two (rate) rise person. This economy is really quite resilient to a lot of the headwinds so if that continues I would be supportive of another 25 basis point rise.” According to Harker, who is not a voting member of the FOMC this year, the central bank needs to consider a rate hike as early as its April 28th-29th meeting.

Today gold trading may be influenced by the monthly report on US durable goods orders. The value of durable goods orders in the United States probably decreased 2.3% in February from a month ago, according to the median forecast by experts, following a revised down 4.7% surge in January. The latter has been the strongest monthly gain since July 2014, when orders’ value was reported to have increased 22.6%. At the same time, the value of durable goods orders, excluding transportation, probably decreased 0.2% in February from a month ago, according to expectations, following a revised down 1.7% surge in January. The latter has been the largest monthly increase since June 2014, when core orders were up at a revised down 1.9%. In case the general index dropped at a faster-than-projected pace, this would have a strong bearish effect on the US dollar and a strong bullish effect on gold, due to negative implications in regard to the wider gauge of production, factory orders. The US Census Bureau is scheduled to release the official report at 12:30 GMT.

Meanwhile, silver futures for delivery in May were retreating 0.46% on the day to trade at $15.220 per troy ounce, after going down as low as $15.165 a troy ounce during the early phase of the European trading session. It has been the lowest price level since March 10th, when silver recorded a daily low of $15.165 per troy ounce as well.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,229.53
R1 – $1,240.47
R2 – $1,258.63
R3 – $1,269.57

S1 – $1,211.37
S2 – $1,200.43
S3 – $1,182.27

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

Central Pivot Point – $1,250.63
R1 – $1,273.27
R2 – $1,292.73
R3 – $1,315.37

S1 – $1,231.17
S2 – $1,208.53
S3 – $1,189.07