Gold trading outlook: futures trade near 2-month lows ahead of the US data string

On Monday (in GMT terms) gold for delivery in December traded within the range of $1,317.2-$1,328.5. Futures closed at $1,327.1, inching up 0.09% compared to Friday’s close. It has been the 155th gain in the past 326 trading days and also a second consecutive one. The daily low has been a level unseen since June 30th, when a low of $1,314.5 was recorded. The precious metal has pared its slump to 2.24% 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 0.29% on Tuesday to trade at $1,323.2 per troy ounce. The precious metal went up as high as $1,328.9 during early Asian trade, while the current daily low was at $1,321.9 per troy ounce, recorded during the mid 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 up 0.23% on the day at a level of 95.75, after going up as high as 95.83 earlier. The latter has been the highest level for this index since August 12th (95.96). The gauge has increased its advance to 0.27% so far during the current month, following a 0.74% retreat in July.

Today gold trading may be influenced by the Conference Boards monthly survey on consumer confidence in the United States. Confidence among consumers in the country probably lowered in August, with the corresponding index coming in at a reading of 97.0, according to market expectations. In July the gauge was reported at 97.3, while outstripping the median estimate of 95.9. In case the index slowed down more than anticipated, this would have a strong bearish effect on the US dollar and a strong bullish effect on gold, as lower confidence suggests a lesser willingness to spend and, respectively, a slower economic growth. The Conference Board research group is to publish the official index reading at 14:00 GMT.

The yellow metal lost ground sharply last Friday, after in a statement at the Jackson Hole symposium the Fed Chair, Janet Yellen, noted that the case for a rate hike has strengthened in the past months. However, she did not provide clues over the timing of the central banks potential move on borrowing costs. Yesterday futures tumbled to 2-month lows, as the US dollar advanced for a second straight trading day, supported by Fed officials remarks.

As the week progresses, a string of key macroeconomic data is to be released out of the United States, which may indicate whether economy is resilient enough to withstand a rate hike.

According to CME’s FedWatch Tool, as of August 29th, market players saw a 21.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, down from 33.0% in the prior business day, and a 25.9% chance of a hike in November, down from 38.5% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 54.2% on August 29th, down from 59.1% in the preceding business day.

Meanwhile, silver futures for delivery in September were edging down 0.26% to trade at $18.720 per troy ounce, after going down as low as $18.670 a troy ounce during the mid phase of the European trading session. Yesterday the metal slipped as low as $18.370 a troy ounce, which has been a level unseen since June 30th.

Daily, Weekly and Monthly Pivot Levels

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

R1 – $1,328.1
R2 – $1,329.2
R3 (Range Resistance – Sell) – $1,330.2
R4 (Long Breakout) – $1,333.3
R5 (Breakout Target 1) – $1,336.9
R6 (Breakout Target 2) – $1,338.5

S1 – $1,326.1
S2 – $1,325.0
S3 (Range Support – Buy) – $1,324.0
S4 (Short Breakout) – $1,320.9
S5 (Breakout Target 1) – $1,317.3
S6 (Breakout Target 2) – $1,315.7

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

Central Pivot Point – $1,331.9
R1 – $1,342.8
R2 – $1,359.7
R3 – $1,370.6
R4 – $1,381.5

S1 – $1,315.0
S2 – $1,304.1
S3 – $1,287.2
S4 – $1,270.3

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