Gold trading outlook: futures retreat a third day on stronger USD, Fed rate hike bets

On Monday (in GMT terms) gold for delivery in December traded within the range of $1,335.3-$1,343.9. Futures closed at $1,341.3, edging down 0.23% compared to Thursday’s close. It has been the 164th drop in the past 311 trading days and also a second consecutive one. The daily low has been the lowest price level since July 29th, when a low of $1,335.0 per troy ounce was registered. The commodity has extended its slump to 1.18% 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 edging down 0.12% on Tuesday to trade at $1,339.7 per troy ounce. The precious metal went up as high as $1,343.0 during early Asian trade, while the current daily low was at $1,336.0 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 inching up 0.01% on the day at a level of 96.30, after going up as high as 96.47 earlier. The gauge has gone up 0.86% so far during the current month, following a 0.74% retreat in July.

Gold continued to retreat on the back of stronger US Dollar, after Fridays US employment data implied a resilient labor market and added to the case of a rate hike by the Federal Reserve by the end of 2016.

According to CME’s FedWatch Tool, as of August 8th, market players saw a 12.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, down from 15.0% in the prior business day, and a 15.6% chance of a hike in November, up from 15.0% during the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 43.9% on August 8th, up from 43.4% in the preceding business day.

Meanwhile, silver futures for delivery in September were losing 0.49% on the day to trade at $19.707 per troy ounce, after going down as low as $19.648 a troy ounce during the early phase of the European 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 – $1,342.1
R2 – $1,342.9
R3 (Range Resistance – Sell) – $1,343.7
R4 (Long Breakout) – $1,346.0
R5 (Breakout Target 1) – $1,348.8
R6 (Breakout Target 2) – $1,349.9

S1 – $1,340.5
S2 – $1,339.7
S3 (Range Support – Buy) – $1,338.9
S4 (Short Breakout) – $1,336.6
S5 (Breakout Target 1) – $1,333.8
S6 (Breakout Target 2) – $1,332.7

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