Gold trading outlook: futures erase earlier gains as focus sets on the FOMC minutes

On Tuesday gold for delivery in June traded within the range of $1,216.40-$1,238.30. Futures closed at $1,232.40, soaring 1.30% on a daily basis. It has been the 23rd gain in the past 45 trading days and also the sharpest one since March 17th, when the commodity went up 2.86%. The daily high has been the highest level since March 31st, when the metal reached a high of $1,239.60. Gold has lost 0.56% of its value so far during the current month, following three consecutive months of gains.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were losing 0.40% on Wednesday to trade at $1,227.80 per troy ounce. The precious metal went up as high as $1,233.80 during the early phase of the Asian trading session, while the current daily low was at $1,226.10 per troy ounce, recorded during early European trade.

Today gold trading may be strongly influenced by the minutes from the Federal Reserves March 15th-16th meeting, as this document may provide a detailed insight on the central banks policy stance. In addition, Fed Chair Janet Yellen is expected to speak tomorrow, while market players will be paying a close attention to any clues regarding how the tightening cycle is to develop in the future.

During her statement at the Economic Club of New York on March 29th Yellen used a rather dovish tone, saying that future policy adjustments need to be cautious, because of uncertainty regarding growth and inflation outlook.

In China, the Caixin Services PMI was reported to have advanced to 52.2 in March from a reading of 51.2 in the preceding month. According to the official report, released at 1:45 GMT on Wednesday: “…the reading continued to point to a modest rate of expansion that was slower than the series average. Meanwhile, manufacturing output returned to growth after an 11-month sequence of stagnant or reduced production, though the rate of growth was only marginal.” However, it was underscored that overall employment in the sector dropped at the fastest rate since January 2009. China is the worlds largest producer and the second largest consumer of gold following India.

Meanwhile, silver futures for delivery in May were inching down 0.07% on the day to trade at $15.125 per troy ounce, after going down as low as $15.035 a troy ounce during the late 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 – $1,229.03
R1 – $1,241.67
R2 – $1,250.93
R3 – $1,263.57

S1 – $1,219.77
S2 – $1,207.13
S3 – $1,197.87

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