Gold trading outlook: futures distance from two-day highs as the US dollar regains ground

On Wednesday gold for delivery in June traded within the range of $1,266.90-$1,279.95. Futures closed at $1,279.00, surging 1.19% from Tuesday’s close. It has been the 37th gain in the past 71 trading days and also the steepest one since May 6th, when the yellow metal advanced 1.69%. The daily high has been the highest price level since May 9th, when a high of $1,286.50 was recorded. The precious metal has dropped 1.27% so far during the current month, following four consecutive months of advance.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were retreating 0.44% on Thursday to trade at $1,273.35 per troy ounce. The precious metal went up as high as $1,279.95 during early Asian trade, while the current daily low was at $1,271.50 per troy ounce, recorded during early European session.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was edging up 0.19% on the day at a level of 93.98. Yesterday the index slipped to as low as 93.65, or a level unseen since May 6th, after which it closed at 93.80 to mark its first drop in the past seven trading days. Stronger dollar usually pressures demand for gold and other dollar-denominated commodities, as they tend to become more expensive to holders of other currencies.

Today gold trading may be influenced by the weekly report on US initial jobless claims. The number of people in the country, who filed for unemployment assistance for the first time during the business week ended on May 6th, probably fell to 270 000, according to market consensus, from 274 000 in the preceding week. The latter has been the highest number of claims since the business week ended on March 25th, when 276 000 claims were reported. In case the number of claims met expectations or decreased further, this would have a moderate bullish effect on the US dollar and a moderate bearish effect on gold.

Market players will also be paying a close attention to the remarks by several Fed representatives. At 15:30 GMT the Federal Reserve President for Boston, Eric Rosengren, is expected to take a statement, followed by the Fed President for Kansas and also a FOMC member, Esther George, at 17:30 GMT.

Meanwhile, silver futures for delivery in July were losing 0.86% on the day to trade at $17.300 per troy ounce, after going down as low as $17.250 a troy ounce during the early phase of the European trading session. Yesterday the commodity tested highs unseen since May 6th, rising to $17.620 per troy ounce.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,275.28
R1 – $1,283.67
R2 – $1,288.33
R3 – $1,296.72

S1 – $1,270.62
S2 – $1,262.23
S3 – $1,257.57

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

Central Pivot Point – $1,289.37
R1 – $1,307.93
R2 – $1,322.97
R3 – $1,341.53

S1 – $1,274.33
S2 – $1,255.77
S3 – $1,240.73