Gold trading outlook: futures off 1-week highs on profit taking, Chicago PMI, Fed speakers eyed

On Wednesday gold for delivery in June traded within the range of $1,223.40-$1,245.90. Futures closed at $1,228.50, shedding 0.57% on a daily basis. It has been the 20th drop in the past 41 trading days and also the steepest one since March 23rd. The daily high has been the highest level since March 23rd, when a high of $1,247.70 was recorded. The yellow metal has lost 0.16% of its value so far during the current month.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were edging up 0.33% on Thursday to trade at $1,232.50 per troy ounce. The precious metal went up as high as $1,232.70 during the early phase of the European trading session, while the current daily low was at $1,225.60 per troy ounce, recorded during early Asian trade.

Following the recent rally to 1-week highs, gold futures demonstrated a certain retreat yesterday, as market players locked in their gains.

During her statement at the Economic Club of New York on March 29th Federal Reserve Chair, Janet Yellen, used a rather dovish tone, noting that future policy adjustments need to be cautious due to uncertainty regarding growth and inflation outlook as well as market turbulence.

Market players now await the statements by two more Federal Reserve officials – the Fed President for Chicago, Charles Evans, scheduled to speak at 13:30 GMT today and the Fed President for New York, William Dudley, scheduled to speak at 21:00 GMT.

Additionally, gold trading may be influenced by the monthly survey on manufacturing activity in the Chicago area. The respective Purchasing Managers’ Index (PMI) probably improved to a reading of 50.0 in March, according to market expectations, from 47.6 during the prior month. The latter has been the lowest reading since December 2015, when the PMI came in at 42.9. A reading of 50.00 indicates no change in business conditions. In case the PMI improved more than forecast, this would have a moderate bullish effect on the US dollar and a moderate bearish effect on gold. The ISM-Chicago Inc. will release the official reading of its barometer at 13:45 GMT.

Meanwhile, silver futures for delivery in May were gaining 0.45% on the day to trade at $15.280 per troy ounce, after going up as high as $15.325 a troy ounce during the early phase of the European trading session.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,232.60
R1 – $1,241.80
R2 – $1,255.10
R3 – $1,264.30

S1 – $1,219.30
S2 – $1,210.10
S3 – $1,196.80

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

Central Pivot Point – $1,230.60
R1 – $1,247.00
R2 – $1,272.60
R3 – $1,289.00

S1 – $1,205.00
S2 – $1,188.60
S3 – $1,163.00