Gold trading outlook: futures struggle for direction on Fed rate outlook assessment

On Wednesday (in GMT terms) gold for delivery in December traded within the range of $1,345.7-$1,363.6. Futures closed at $1,351.9, edging up 0.39% compared to Tuesday’s close. It has been the 149th gain in the past 313 trading days and also a second consecutive one. The daily high has been the highest level since August 5th, when a high of $1,371.0 was registered. The commodity has trimmed its slump to 0.41% 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 inching down 0.04% on Thursday to trade at $1,351.3 per troy ounce. The precious metal went up as high as $1,353.8 during early European trade, while the current daily low was at $1,345.8 per troy ounce, recorded during the late phase of the Asian 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 up 0.21% on the day at a level of 95.79, after going up as high as 95.87 earlier. The index was poised to rebound after a two-day string of losses. The gauge has increased its advance to 0.30% so far during the current month, following a 0.74% retreat in July.

Gold futures continued to edge higher on Wednesday, as market players reassessed whether an early rate hike by the Federal Reserve was to be expected this year.

According to CME’s FedWatch Tool, as of August 10th, market players saw a 9.0% 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 9.0% chance of a hike in November, down from 16.7% during the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 39.4% on August 10th, down from 40.6% in the preceding business day. A prolonged low-rate environment tends to support demand for haven assets such as the yellow metal.

Today gold trading may be influenced by the weekly report on lay-offs in the United States. The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on August 5th, probably fell to 265 000, according to market consensus, from 269 000 in the preceding week. In case the number of claims met expectations or decreased further, this would have a moderate bullish effect on the US dollar and a moderate bearish effect on gold. The US Department of Labor is to release the weekly data at 12:30 GMT.

Meanwhile, silver futures for delivery in September were edging up 0.11% on the day to trade at $20.193 per troy ounce, after going up as high as $20.340 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 – $1,353.5
R2 – $1,355.2
R3 (Range Resistance – Sell) – $1,356.8
R4 (Long Breakout) – $1,361.7
R5 (Breakout Target 1) – $1,367.5
R6 (Breakout Target 2) – $1,369.9

S1 – $1,350.3
S2 – $1,348.6
S3 (Range Support – Buy) – $1,347.0
S4 (Short Breakout) – $1,342.1
S5 (Breakout Target 1) – $1,336.3
S6 (Breakout Target 2) – $1,333.9

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