Gold trading outlook: futures dwell in the area near recent lows as markets eye the US data string

On Wednesday (in GMT terms) gold for delivery in December traded within the range of $1,320.3-$1,333.2. Futures closed at $1,329.7, edging up 0.45% compared to Tuesday’s close. It has been the 159th gain in the past 337 trading days. The precious metal has increased its advance to 1.39% 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 0.48% on Thursday to trade at $1,323.3 per troy ounce. The precious metal went up as high as $1,329.2 during mid-Asian trade, while the current daily low was at $1,321.8 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 0.06% on the day at a level of 95.39, after going up as high as 95.56 earlier. The gauge has increased its drop to 0.65% so far in September, following a 0.54% advance in August.

Yesterday gold futures rebounded after a five-day losing streak, as US bond yields distanced from earlier highs, while investor rate hike expectations seemed to have moderated. Todays reports on US retail sales and industrial production, as well as tomorrows data on consumer price inflation and consumer confidence are to shape near-term expectations.

Retail sales in the United States probably dropped 0.1% in August from a month ago, according to the median forecast by experts, after unexpectedly remaining flat in July. US core retail sales, or retail sales ex autos, probably rose 0.3% in August compared to a month ago, according to expectations, following a 0.3% slump in July. The latter has been the first drop in five months and also the steepest one since September 2015. In case the general index of sales fell at a sharper rate than anticipated in August, this would have a strong bearish effect on the US dollar and would certainly boost gold. The official report by the US Census Bureau is due out at 12:30 GMT.

A separate report may show that US industrial output shrank 0.3% in August, according to market expectations. In July the index of production surged at a monthly rate of 0.7%, or the fastest since November 2014. A larger-than-projected monthly decline in the index would usually have a moderate bearish effect on the US dollar and a moderate bullish effect on gold. The Board of Governors of the Federal Reserve is to release the official production data at 13:15 GMT.

According to CME’s FedWatch Tool, as of September 14th, market players saw a 15.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, or unchanged compared to the prior two business days, and a 23.8% chance of a hike in November, up from 22.0% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 52.8% on September 14th, down from 55.4% in the preceding business day.

Meanwhile, silver futures for delivery in December were edging down 0.08% on the day to trade at $19.050 per troy ounce, after going down as low as $18.950 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 – $1,330.9
R2 – $1,332.1
R3 (Range Resistance – Sell) – $1,333.2
R4 (Long Breakout) – $1,336.8
R5 (Breakout Target 1) – $1,340.9
R6 (Breakout Target 2) – $1,342.7

S1 – $1,328.5
S2 – $1,327.3
S3 (Range Support – Buy) – $1,326.2
S4 (Short Breakout) – $1,322.6
S5 (Breakout Target 1) – $1,318.5
S6 (Breakout Target 2) – $1,316.7

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