Gold trading outlook: futures off 1-week highs, remain supported on monetary stimulus prospects

On Monday gold for delivery in August traded within the range of $1,338.85-$1,360.15. Futures closed at $1,352.00, rising 0.97% compared to Friday’s close. It has been the 134th gain in the past 286 trading days and also a second consecutive one. The daily high has been the highest level since June 24th, when a high of $1,362.45 was registered. The commodity has gained 2.21% so far during the current month, after advancing 8.71% in June. The latter has been the best monthly performance since February, when the metal appreciated 10.52%.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were edging down 0.35% on Tuesday to trade at $1,347.25 per troy ounce. The precious metal went up as high as $1,354.65 during early Asian trade, while the current daily low was at $1,340.50 per troy ounce, recorded during the early phase of the Asian trading session as well.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was inching up 0.04% on the day at a level of 95.65, after climbing as high as 95.75 earlier. The index has dropped 0.56% so far during the current month, following a 0.33% gain in June.

The yellow metal enjoyed a solid support in the last several trading days, as expectations of further policy tightening by the Federal Reserve in the upcoming months eased amid the overall uncertainty following the UK vote on EU membership. The commodity will probably also draw support from prospects of additional easing measures by other central banks worldwide as a response to the potential negative effects from Britain parting ways with the EU.

Today gold trading may be influenced by the monthly report on US factory orders. The total value of factory orders in the country probably shrank 1.0% in May compared to April, according to the median estimate by experts, following an unrevised 1.9% surge in the preceding month. The latter has been the steepest increase since June 2015, when factory orders went up 2.2%. Excluding the sector of transportation, factory orders went up 0.5% in April from a month ago, while extending gains in March. In case the general index of new orders decreased at a faster-than-anticipated rate, this would trigger a moderate bearish impulse for the US dollar and would be bullish for gold, as it implies future growth deceleration. The US Census Bureau will release the official data at 14:00 GMT.

Market players will be also paying a close attention to a statement by the Fed President for New York and also a FOMC member, William Dudley, scheduled at 18:30 GMT.

Meanwhile, silver futures for delivery in September were losing 3.11% on the day to trade at $19.852 per troy ounce, after going down as low as $19.617 a troy ounce during the mid phase of the Asian trading session. Yesterday silver touched highs unseen since July 13th 2014, at $21.207 a troy ounce.

Daily, Weekly and Monthly Pivot Levels

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

Central Pivot Point – $1,350.33
R1 – $1,361.82
R2 – $1,371.63
R3 – $1,383.12

S1 – $1,340.52
S2 – $1,329.03
S3 – $1,319.22

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

Central Pivot Point – $1,331.60
R1 – $1,351.60
R2 – $1.364.20
R3 – $1,384.20

S1 – $1,319.00
S2 – $1,299.00
S3 – $1,286.40

In monthly terms, for the yellow metal we have the following pivots:

Central Pivot Point – $1,297.02
R1 – $1,386.03
R2 – $1,451.47
R3 – $1,540.48

S1 – $1,231.58
S2 – $1,142.57
S3 – $1,077.13