Gold trading outlook: futures retreat a fourth day after Fed’s Rosengren remarks, Brainard’s statement ahead

On Friday (in GMT terms) gold for delivery in December traded within the range of $1,331.2-$1,343.6. Futures closed at $1,334.5, retreating 0.53% compared to Thursday’s close. It has been the 176th drop in the past 334 trading days and also a third consecutive one. The daily low has been a level unseen since September 6th, when a low of $1,325.5 per troy ounce was registered. In weekly terms, gold futures added 0.59% to their value. It has been the 20th gain in the past 36 weeks and also the steepest one since the week ended on July 31st. The precious metal has pared its advance to 1.76% 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 0.21% on Monday to trade at $1,331.7 per troy ounce. The precious metal went up as high as $1,333.8 during early European trade, while the current daily low was at $1,328.4 per troy ounce, recorded during the early 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 inching up 0.06% on the day at a level of 95.39, after going up as high as 95.44 earlier. The gauge has pared its drop to 0.65% so far in September, following a 0.54% advance in August.

Gold retreated for a third straight trading day on Friday, following remarks made by the Fed President for Boston and also a member of the Federal Open Market Committee, Eric Rosengren. He said that low interest rate environment might increase the possibility of overheating the US economy and, in order to maintain full employment, it was appropriate to gradually tighten monetary policy. His comments somewhat reinvigorated investor expectations of a rate hike, while the same view may be supported by another FOMC voting member, Lael Brainard, who is to speak later on Monday.

According to CME’s FedWatch Tool, as of September 9th, market players saw a 24.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, up from 18.0% in the prior business day, and a 28.7% chance of a hike in November, up from 21.3% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 59.2% on September 9th, up from 51.4% in the preceding business day.

Meanwhile, silver futures for delivery in December were losing 2.02% on the day to trade at $18.977 per troy ounce, after going down as low as $18.845 a troy ounce during the early phase of the Asian trading session. The latter has been the lowest price level for silver since September 2nd, when a low of $18.825 per troy ounce was recorded.

Daily, Weekly and Monthly Pivot Levels

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

R1 – $1,335.6
R2 – $1,336.8
R3 (Range Resistance – Sell) – $1,337.9
R4 (Long Breakout) – $1,341.3
R5 (Breakout Target 1) – $1,345.3
R6 (Breakout Target 2) – $1,346.9

S1 – $1,333.4
S2 – $1,332.2
S3 (Range Support – Buy) – $1,331.1
S4 (Short Breakout) – $1,327.7
S5 (Breakout Target 1) – $1,323.7
S6 (Breakout Target 2) – $1,322.1

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

Central Pivot Point – $1,339.2
R1 – $1,352.9
R2 – $1,371.3
R3 – $1,385.0
R4 – $1,398.7

S1 – $1,320.8
S2 – $1,307.1
S3 – $1,288.7
S4 – $1,270.3

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