Gold trading outlook: futures still mark time, as markets await the FOMC Minutes release

On Tuesday (in GMT terms) gold for delivery in December traded within the range of $1,254.3-$1,264.0. Futures closed at $1,255.9, edging down 0.36% compared to Monday’s close. It has been the 190th drop in the past 356 trading days. The precious metal has increased its drop to 4.65% so far during the current month, after gaining 0.43% in September.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were edging up 0.10% on Wednesday to trade at $1,257.2 per troy ounce. The precious metal went up as high as $1,259.5 during mid-Asian trade, while the current daily low was at $1,252.3 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 0.02% on the day at a level of 97.74, after going up as high as 97.79 earlier. The latter has been the highest level for this index since March 10th. The gauge has extended its advance to 2.45% so far in October, following a 0.65% drop in September.

Gold futures continued to move within a relatively tight congestion area between the $1,254 and the $1,267 levels, as major macroeconomic reports and other volatility-triggering events were scheduled later in the current week.

Today gold trading may be strongly influenced by the highly anticipated Minutes from the Federal Open Market Committees policy meeting, held on September 20th-21st. It may offer further clues on whether there still were diverging views on policy among FOMC members. The Committee left the target range for the federal funds rate intact between 0.25% and 0.50% for a sixth consecutive meeting last month, as largely expected. Policy makers said the case for a rate hike this year was stronger, with 3 out of 10 members of the Committee voting in favor of raising borrowing costs. The document is to be released at 18:00 GMT.

Investor medium-term rate hike expectations remained unchanged at four-month highs.

According to CME’s FedWatch Tool, as of October 11th, market players saw an 8.3% chance of a rate hike occurring at the Federal Reserve’s policy meeting in November, or unchanged compared to the prior two business days, and a 69.5% chance of a hike in December, also unchanged compared to the preceding business day. As far as the February 1st 2017 meeting is concerned, the probability of such a move was seen at 71.9% on October 11th, or unchanged from the prior business day.

Meanwhile, silver futures for delivery in December were edging up 0.30% on the day to trade at $17.562 per troy ounce, after going down as low as $17.480 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 – $1,256.8
R2 – $1,257.7
R3 (Range Resistance – Sell) – $1,258.6
R4 (Long Breakout) – $1,261.2
R5 (Breakout Target 1) – $1,264.4
R6 (Breakout Target 2) – $1,265.6

S1 – $1,255.0
S2 – $1,254.1
S3 (Range Support – Buy) – $1,253.2
S4 (Short Breakout) – $1,250.6
S5 (Breakout Target 1) – $1,247.4
S6 (Breakout Target 2) – $1,246.2

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

Central Pivot Point – $1,272.6
R1 – $1,301.9
R2 – $1,352.0
R3 – $1,381.3
R4 – $1,410.7

S1 – $1,222.5
S2 – $1,193.2
S3 – $1,143.1
S4 – $1,093.1

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

Central Pivot Point – $1,326.7
R1 – $1,348.0
R2 – $1,378.8
R3 – $1,400.1
R4 – $1,421.3

S1 – $1,295.9
S2 – $1,274.6
S3 – $1,243.8
S4 – $1,212.9