Gold trading outlook: futures fall to lows unseen in a week, as US NFP report boosts rate hike bets

On Friday (in GMT terms) gold for delivery in December traded within the range of $1,340.4-$1,371.0. Futures closed at $1,344.4, plummeting 1.68% compared to Thursday’s close. It has been the 163rd drop in the past 310 trading days. The daily low has been the lowest price level since July 29th, when a low of $1,335.0 per troy ounce was registered. In weekly terms, the precious metal lost 0.95% of its value during the past week. It has been the 14th drop in the past 31 weeks. The commodity has depreciated 0.95% so far in August, after surging 2.86% in July.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were losing 0.61% on Monday to trade at $1,336.2 per troy ounce. The precious metal went up as high as $1,343.9 during late Asian trade, while the current daily low was at $1,335.3 per troy ounce, recorded during the early phase of the European trading session.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was edging down 0.06% on the day at a level of 96.25, after going up as high as 96.32 earlier. The gauge has gone up 0.83% so far during the current month, following a 0.74% retreat in July.

The precious metal lost value sharply on Friday, after an official government report revealed employers in all sectors of the US economy, excluding the farming industry, added 255 000 job positions in July, outstripping market expectations and following a revised up 292 000 jobs in June. Employment rose in professional and business services, health care, and financial activities, but continued to shrink in mining. At the same time, the rate of unemployment in the country remained stable at 4.9% in July, as the labor force expanded. The robust data brought back to life expectations among market players that the Federal Reserve may raise the target range for the federal funds rate by the end of the year.

According to CME’s FedWatch Tool, as of August 5th, market players saw a 15.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, up from 9.0% in the prior business day, and a 15.0% chance of a hike in November, up from 10.9% during the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 43.4% on August 5th, up from 32.1% in the preceding business day.

Meanwhile, silver futures for delivery in September were losing 0.47% on the day to trade at $19.723 per troy ounce, after going down as low as $19.515 a troy ounce during the early phase of the Asian trading session.

Daily, Weekly and Monthly Pivot Levels

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

R1 – $1,347.2
R2 – $1,350.0
R3 (Range Resistance – Sell) – $1,352.8
R4 (Long Breakout) – $1,361.2
R5 (Breakout Target 1) – $1,371.1
R6 (Breakout Target 2) – $1,375.1

S1 – $1,341.6
S2 – $1,338.8
S3 (Range Support – Buy) – $1,336.0
S4 (Short Breakout) – $1,327.6
S5 (Breakout Target 1) – $1,317.7
S6 (Breakout Target 2) – $1,313.7

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

Central Pivot Point – $1,353.0
R1 – $1,365.6
R2 – $1,386.8
R3 – $1,399.4
R4 – $1,412.0

S1 – $1,331.8
S2 – $1,319.2
S3 – $1,298.0
S4 – $1,276.8

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

Central Pivot Point – $1,348.5
R1 – $1,386.5
R2 – $1,415.4
R3 – $1,453.4
R4 – $1,491.4

S1 – $1,319.5
S2 – $1,281.5
S3 – $1,252.6
S4 – $1,223.6