Gold trading outlook: futures hold close to 2-week highs ahead of Fed speakers, Clinton-Trump presidential debate

On Friday (in GMT terms) gold for delivery in December traded within the range of $1,337.4-$1,344.5. Futures closed at $1,341.7, shedding 0.22% compared to Thursday’s close. It has been the 181st drop in the past 344 trading days. In weekly terms, gold futures added 2.40% to their value during the past week. It has been the 21st gain in the past 38 weeks and also the steepest one since the week ended on June 12th. The precious metal has increased its advance to 2.31% 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 0.12% on Monday to trade at $1,340.1 per troy ounce. The precious metal went up as high as $1,343.9 during early Asian trade, while the current daily low was at $1,336.5 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 down 0.10% on the day at a level of 95.31, after going down as low as 95.27 earlier. The gauge has trimmed its drop to 0.73% so far in September, following a 0.54% advance in August.

Markets focus now turns to the first televised US presidential debate between Donald Trump and Hillary Clinton ahead of the November 8th election. The debate is to take place at 9:00 PM ET (or 1:00 GMT on Tuesday) at Hofstra University in New York. The latest poll by Reuters/Ipsos revealed a 4-point lead for Clinton to her contender – 41% of the votes compared to 37% for Donald Trump.

Market players will be also paying a close attention to the public appearances of several Fed officials on Monday. At 13:30 GMT Federal Open Market Committee member Neel Kashkari is to take a statement, followed by Daniel Tarullo at 15:45 GMT and Robert Kaplan at 17:30 GMT. Any remarks in regard to the Bank’s policy stance or US economic outlook would certainly heighten gold volatility.

The yellow metal went up as high as $1,347.8 a troy ounce on Thursday last week, or its highest price level since September 8th, after the Federal Reserve left the target range for the federal funds rate intact between 0.25% and 0.50% for a sixth consecutive meeting, as largely expected.

According to CME’s FedWatch Tool, as of September 23rd, market players saw a 12.4% chance of a rate hike occurring at the Federal Reserve’s policy meeting in November, or unchanged compared to the prior business day, and a 54.2% chance of a hike in December, down from 58.4% in the preceding business day. As far as the February 1st 2017 meeting is concerned, the probability of such a move was seen at 57.9% on September 23rd, down from 60.8% in the prior business day.

Meanwhile, silver futures for delivery in December were retreating 1.55% on the day to trade at $19.502 per troy ounce, after going down as low as $19.477 a troy ounce during the early phase of the European trading session. The latter has been the lowest price level for the commodity since September 21st.

Daily, Weekly and Monthly Pivot Levels

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

R1 – $1,342.4
R2 – $1,343.0
R3 (Range Resistance – Sell) – $1,343.7
R4 (Long Breakout) – $1,345.6
R5 (Breakout Target 1) – $1,347.9
R6 (Breakout Target 2) – $1,348.8

S1 – $1,341.0
S2 – $1,340.4
S3 (Range Support – Buy) – $1,339.7
S4 (Short Breakout) – $1,337.8
S5 (Breakout Target 1) – $1,335.5
S6 (Breakout Target 2) – $1,334.6

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

Central Pivot Point – $1,333.5
R1 – $1,356.0
R2 – $1,370.4
R3 – $1,392.9
R4 – $1,415.5

S1 – $1,319.1
S2 – $1,296.6
S3 – $1,282.2
S4 – $1,267.9

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