Gold trading outlook: futures trade little changed near 2-month lows ahead of US revised GDP

On Thursday gold for delivery in June traded within the range of $1,219.50-$1,232.60. Futures closed at $1,222.10, edging down 0.11% compared to Wednesday’s close. It has been the 42nd drop in the past 82 trading days and also a seventh consecutive one. The precious metal has gone down 5.22% 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 edging down 0.18% on Friday to trade at $1,219.90 per troy ounce. The precious metal went up as high as $1,223.20 during early European trade, while the current daily low was at $1,211.00 per troy ounce, recorded during the mid phase of the Asian trading session. The latter has been the lowest price level since April 1st, when a low of $1,209.20 was registered.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was edging up 0.17% on the day at a level of 95.30, after reaching 95.31 earlier. The index has increased its advance to 2.42% so far in May. 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 strongly influenced by the key report on revised US GDP. The second estimate of the US Gross Domestic Product probably pointed to an annualized rate of growth of 0.9% in the first quarter of 2016, according to the median forecast by analysts. The preliminary GDP estimate for Q1, reported on April 28th, pointed to an annual growth of 0.5%, or the slowest since Q1 2014. In Q4 the US economy expanded at an annualized rate of 1.4%, according to final data. In case the growth rate revision up was steeper than projected in Q1, this would have a strong bullish effect on the US dollar and a strong bearish effect on gold. The second GDP estimate is to be released at 12:30 GMT.

A separate report by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States improved in May from a month ago. The final reading of the corresponding index, which usually comes out two weeks after the preliminary data, probably came in at 95.4, down from a preliminary value of 95.8. If market expectations were met, this would be the highest level since June 2015, when the gauge of sentiment was reported at a final 96.1. In April the index stood at a final reading of 89.0, down from a preliminary value of 89.7. In case the final value of the May consumer sentiment index outpaced the median forecast by analysts, this would have a moderate bullish effect on the US dollar. The final reading is due out at 14:00 GMT.

Additionally, markets will be paying a close attention to Fed Chair Janet Yellens statement, scheduled at 14:30 GMT.

Meanwhile, silver futures for delivery in July were down 0.43% on the day to trade at $16.300 per troy ounce, after going down as low as $16.160 a troy ounce during the mid phase of the Asian trading session. The latter has been the lowest price level since April 18th, when a low of $16.130 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 – $1,224.73
R1 – $1,229.97
R2 – $1,237.83
R3 – $1,243.07

S1 – $1,216.87
S2 – $1,211.63
S3 – $1,203.77

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

Central Pivot Point – $1,262.57
R1 – $1,277.63
R2 – $1,302.87
R3 – $1,317.93

S1 – $1,237.33
S2 – $1,222.27
S3 – $1,197.03