Gold trading outlook: futures retreat on technical signals, US retail sales report in focus

On Tuesday gold for delivery in June traded within the range of $1,253.30-$1,264.60. Futures closed at $1,256.50, edging down 0.21% on a daily basis. It has been the 24th drop in the past 50 trading days. The daily high has been the highest price level since March 17th, when gold went up as high as $1,270.10 a troy ounce. The commodity has gained 1.35% 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 down 0.47% on Wednesday to trade at $1,250.60 per troy ounce. The precious metal went up as high as $1,258.60 during the early phase of the Asian trading session, while the current daily low was at $1,249.00 per troy ounce, recorded during late Asian trade.

The yellow metal retreated from recent almost 1-month highs, as on the 4-hour time frame the 14-period Relative Strength Index signaled the commodity has risen too much in a relatively short period of time (overbought conditions), while the Moving Average Convergence Divergence (MACD) indicated that bearish momentum has just begun to build up. Gold has recently been supported on the back of weak US dollar.

Meanwhile, in an interview with CNBC yesterday, the Fed President for Dallas, Rob Kaplan, noted that the timing of the next rate hike should depend on incoming macroeconomic data, while such a move should be considered at the Federal Reserves policy meeting in June, in case further improvement in economic outlook is observed.

Today the precious metal may be strongly influenced by the key monthly report on US retail sales. Sales at retailers in the country probably rebounded in March, going up at a monthly rate of 0.4%, according to the median forecast by experts. In February retail sales went down 0.1% to mark their second consecutive month of decline. US core retail sales, or retail sales ex autos, probably increased 0.5% in March compared to a month ago, following a 0.1% drop in February. If so, March would be the fastest rate of increase in core sales since July 2015, when a revised up 0.6% surge was reported. In case the general index of sales rose more than anticipated in March, this would have a strong bullish effect on the US dollar and a strong bearish effect on gold, because of positive implications regarding consumer spending and consumer inflation. The official report is due out at 12:30 GMT.

Meanwhile, silver futures for delivery in May were losing 0.37% on the day to trade at $16.095 per troy ounce, after going down as low as $16.050 a troy ounce during the late phase of the Asian trading session. Yesterday the commodity reached highs unseen since March 18th.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,258.13
R1 – $1,262.97
R2 – $1,269.43
R3 – $1,274.27

S1 – $1,251.67
S2 – $1,246.83
S3 – $1,240.37

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