Gold trading outlook: futures rebound ahead of US trade, non-manufacturing data

On Monday gold for delivery in June traded within the range of $1,215.00-$1,222.30. Futures closed at $1,216.60, shedding 0.45% on a daily basis. It has been the 22nd drop in the past 44 trading days and also a second consecutive one. In weekly terms, the yellow metal went up a meager 0.07% during the past week. It has been the 7th gain in the past 13 weeks. Gold has lost 0.65% of its value so far during the current month, after ticking up a mere 0.02% in March.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were gaining 1.13% on Tuesday to trade at $1,230.30 per troy ounce. The precious metal went up as high as $1,231.00 during the early phase of the European trading session, while the current daily low was at $1,216.20 per troy ounce, recorded during early Asian trade.

Today gold trading may be strongly influenced by a string of macroeconomic data coming out of the United States. The deficit on US balance of trade probably widened to USD 46.20 billion in February, according to market expectations. If so, it would be the largest monthly trade deficit since August 2015, when a revised up gap of USD 48.00 billion was reported. In January the trade gap was reported at USD 45.68 billion, as exports dropped at the steepest rate in six months, while imports returned to contraction. In case the trade deficit widened more than anticipated in February, this would have a strong bearish effect on the US dollar and a strong bullish effect on gold, because of negative implications regarding US economic growth. The Bureau of Economic Analysis will release the official trade data at 12:30 GMT.

A separate report may show activity in United States’ sector of services increased at a faster pace in March from a month ago. The corresponding non-manufacturing PMI probably advanced to a reading of 54.0, according to the median forecast by experts, from a level of 53.4 in February. The latter has been the lowest PMI reading since February 2014, when a level of 51.6 was reported. If expectations were met, March would be the 75th consecutive month, when the gauge stood in the area above 50.0. In case the index accelerated at a steeper rate than anticipated in March, this would have a strong bullish effect on the US dollar and a strong bearish effect on gold. The Institute for Supply Management (ISM) is to release the official PMI reading at 14:00 GMT.

Meanwhile, silver futures for delivery in May were gaining 0.73% on the day to trade at $15.090 per troy ounce, after going up as high as $15.150 a troy ounce during the early phase of the Asian 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 – $1,217.97
R1 – $1,220.93
R2 – $1,225.27
R3 – $1,228.23

S1 – $1,213.63
S2 – $1,210.67
S3 – $1,206.33

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

Central Pivot Point – $1,225.47
R1 – $1,241.73
R2 – $1,261.27
R3 – $1,277.53

S1 – $1,205.93
S2 – $1,189.67
S3 – $1,170.13