Gold trading outlook: futures trade close to three-week highs on weakening US dollar

On Monday gold for delivery in June traded within the range of $1,241.50-$1,261.90. Futures closed at $1,259.20, soaring 1.34% on a daily basis. It has been the 26th gain in the past 49 trading days, a third consecutive one and also the sharpest one since March 17th, when the yellow metal added 2.86% to its value. In addition, the daily high has been the highest price level since March 18th, when gold went up as high as $1,264.40 a troy ounce. The commodity has gained 2.24% so far during the current month, following three consecutive months of advance. In March it inched up a mere 0.02%.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were edging up 0.31% on Tuesday to trade at $1,263.10 per troy ounce. The precious metal went up as high as $1,263.60 during the early phase of the European trading session, while the current daily low was at $1,255.00 per troy ounce, recorded during late Asian trade.

The yellow metal has received a strong support recently on the back of weakening US Dollar, due to prospects of Federal Reserve Bank maintaining the target range for the federal funds rate on hold for some time. There has been indications by Fed officials that the central bank will adhere to a more cautious approach in regard to future rate hikes on dampening global macroeconomic outlook.

Several Federal Open Market Committee representatives are expected to take a statement today. At 13:00 GMT the Fed President for Philadelphia, Patrick Harker, is to speak, followed by the Fed President for San Francisco, John Williams at 19:00 GMT and the Fed President for Richmond, Jeffrey Lacker at 20:00 GMT. Market players will be keeping a close eye on these events for hints over Feds future policy stance.

Any prospects that interest rates are to remain on hold for a while tend to boost gold, as the latter becomes a more attractive instrument to investors compared to higher-yielding assets.

Meanwhile, silver futures for delivery in May were gaining 0.85% on the day to trade at $16.055 per troy ounce, after going up as high as $16.085 a troy ounce during the early phase of the European trading session. It has been the highest price level since March 18th, when a daily high of $16.170 per troy ounce was registered.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,254.20
R1 – $1,266.90
R2 – $1,274.60
R3 – $1,287.30

S1 – $1,246.50
S2 – $1,233.80
S3 – $1,226.10

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

Central Pivot Point – $1,233.47
R1 – $1,251.93
R2 – $1,261.37
R3 – $1,279.83

S1 – $1,224.03
S2 – $1,205.57
S3 – $1,196.13