Gold trading outlook: futures consolidate just below 27-month highs at the start of the week

On Friday (in GMT terms) gold for delivery in August traded within the range of $1,336.50-$1,371.35. Futures closed at $1,358.40, edging down 0.12% compared to Thursday’s close. It has been the 154th drop in the past 290 trading days and also a second consecutive one. In weekly terms, the yellow metal added 1.62% to its value during the past. It has been the 15th gain in the past 27 weeks and also a sixth consecutive one. The commodity has increased its advance to 3.09% so far during the current month, after surging 8.53% in June.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were edging up 0.11% on Monday to trade at $1,359.95 per troy ounce. The precious metal went up as high as $1,376.40 during early Asian trade, while the current daily low was at $1,358.00 per troy ounce, recorded during the early phase of the European trading session.

On July 6th the commodity reached highs unseen since mid-March 2014, going up as high as $1,377.45 per troy ounce.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was advancing 0.45% on the day at a level of 96.74, after climbing as high as 96.81 earlier. The latter has been the gauges highest level since June 27th. The index has gained 0.56% so far during the current month, following a 0.33% increase in June.

On Friday gold volatility was bolstered during the 1-hour period immediately after the release of the US Non-Farm Payrolls report regarding June. Employers in all sectors of the economy with the exception of the farming industry, added 287 000 job positions last month, or well above the market consensus and following a revised down employment growth of just 11 000 jobs in May (38 000 reported previously). Junes numbers have been the strongest since October 2015, when 295 000 jobs were added. At the same time, the jobless rate in the country rose to 4.9% in June from 4.7% in May, as the labor force expanded. The number of people searching for employment increased by 347 000 to reach 7.8 million in June, which neutralized the decline in May. Average earnings per hour, however, rose at a monthly rate of 0.1% in June, falling short of expectations of a 0.2% gain, which suggested a somewhat subdued inflationary pressure. The latter may also urge Fed policy makers to maintain the current monetary policy stance.

According to CMEs FedWatch Tool, as of July 8th, market players saw a 5.9% chance of a rate hike occurring at the Feds policy meetings in September and in November, up from 0% in the prior day. As far as the December meeting is concerned, the probability of such a move was seen at 23.6%, up from 18.4% in the preceding day. At the same time, the probability of a rate cut occurring in July lowered to 1.2% as of July 8th, down from 3.6% on July 7th.

Meanwhile, silver futures for delivery in September were gaining 1.64% on the day to trade at $20.418 per troy ounce, after going up as high as $20.750 a troy ounce during the mid phase of the Asian trading session.

Daily, Weekly and Monthly Pivot Levels

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

Central Pivot Point – $1,355.42
R1 – $1,374.33
R2 – $1,390.27
R3 – $1,409.18
R4 – $1,428.10

S1 – $1,339.48
S2 – $1,320.57
S3 – $1,304.63
S4 – $1,288.70

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

Central Pivot Point – $1,357.45
R1 – $1,378.40
R2 – $1.398.40
R3 – $1,419.35
R4 – $1,440.30

S1 – $1,337.45
S2 – $1,316.50
S3 – $1,296.50
S4 – $1,276.50

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

Central Pivot Point – $1,293.13
R1 – $1,380.87
R2 – $1,443.33
R3 – $1,531.07
R4 – $1,618.80

S1 – $1,230.67
S2 – $1,142.93
S3 – $1,080.47
S4 – $1,018.00