Gold trading outlook: futures distance from 2.5-week highs, but losses seen restrained, Fed speakers ahead

On Thursday (in GMT terms) gold for delivery in December traded within the range of $1,339.1-$1,353.9. Futures closed at $1,341.6, retreating 0.56% compared to Wednesday’s close. It has been the 175th drop in the past 333 trading days and also a second consecutive one. The precious metal has pared its advance to 2.30% so far during the current month, after losing 3.40% in August.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were edging down 0.13% on Friday to trade at $1,339.8 per troy ounce. The precious metal went up as high as $1,343.6 during mid-Asian trade, while the current daily low was at $1,338.5 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 0.11% on the day at a level of 94.94, after going down as low as 94.81 earlier. The gauge has pared its drop to 1.10% so far in September, following a 0.54% advance in August.

Today gold trading may be influenced by the public appearances of several members of the Federal Open Market Committee. At 11:45 GMT the Fed President for Boston, Eric Rosengren, is expected to take a statement, followed by the Fed President for Dallas, Robert Kaplan, at 13:30 GMT. Any remarks made in regard to the Bank’s monetary policy stance or the US economic outlook would certainly boost gold volatility.

The commodity has trimmed recent gains, but a broadly weaker US dollar may continue to support gold prices. The latest string of weaker-than-projected US manufacturing, services and employment data points seemed to have eased investor expectations that a rate hike by the Fed may take place as early as this month.

According to CME’s FedWatch Tool, as of September 8th, market players saw an 18.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, up from 15.0% in the prior business day, and a 21.3% chance of a hike in November, up from 20.2% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 51.4% on September 8th, up from 46.9% in the preceding business day.

Meanwhile, silver futures for delivery in December were shedding 0.49% on the day to trade at $19.582 per troy ounce, after going down as low as $19.530 a troy ounce during the mid 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 – $1,343.0
R2 – $1,344.3
R3 (Range Resistance – Sell) – $1,345.7
R4 (Long Breakout) – $1,349.7
R5 (Breakout Target 1) – $1,354.5
R6 (Breakout Target 2) – $1,356.4

S1 – $1,340.2
S2 – $1,338.9
S3 (Range Support – Buy) – $1,337.5
S4 (Short Breakout) – $1,333.5
S5 (Breakout Target 1) – $1,328.7
S6 (Breakout Target 2) – $1,326.8

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

Central Pivot Point – $1,322.1
R1 – $1,338.6
R2 – $1,350.6
R3 – $1,367.1
R4 – $1,383.7

S1 – $1,310.1
S2 – $1,293.6
S3 – $1,281.6
S4 – $1,269.7

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

Central Pivot Point – $1,330.8
R1 – $1,354.8
R2 – $1,398.1
R3 – $1,422.1
R4 – $1,446.0

S1 – $1,287.5
S2 – $1,263.5
S3 – $1,220.2
S4 – $1,176.8