Gold trading outlook: futures touch a fresh 1-month peak on US presidential election uncertainty, FOMC policy decision awaited

On Tuesday (in GMT terms) gold for delivery in December traded within the range of $1,276.3-$1,292.9. Futures closed at $1,288.0, soaring 1.17% compared to Monday’s close. It has been the 175th gain in the past 371 trading days and also the steepest one since September 6th. The daily high has been a level not seen since October 4th, when a high of $1,315.4 a troy ounce was registered. The precious metal has risen 1.17% so far during the current month, after losing 3.34% in October.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were advancing 0.72% on Wednesday to trade at $1,297.3 per troy ounce. The precious metal went up as high as $1,298.6 during early European trade, while the current daily low was at $1,288.4 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 edging down 0.21% on the day at a level of 97.55, after going down as low as 97.39 earlier. The latter has been the lowest level for this index since October 11th. The gauge has slumped 0.87% so far in November, following a 3.18% advance in October (or the strongest monthly performance since November 2015).

Demand for haven assets such as gold has recently been supported, pushing the metal to a fresh one-month peak, following news in the media, that the Federal Bureau of Investigation intended to examine more emails in relation to Hillary Clintons private email use, which brought about concerns over a surprising outcome of the November 8th presidential election. Market players remained cautious, as two separate surveys revealed Republican candidate Donald Trump taking a slight lead ahead of his Democratic rival Hillary Clinton.

Today market participants will be paying a close attention to the outcome of the Federal Open Market Committees two-day policy meeting. The Committee will probably keep the target range for the federal funds rate intact between 0.25% and 0.50% for a seventh meeting in a row, according to the median forecast by experts. The latest FOMC Minutes, released on October 12th, revealed that September’s decision was a close call, while the case for raising rates had become stronger during the past several months, which suggested a hike in 2016 was still a possibility. The FOMC will announce its official decision on policy at 18:00 GMT.

Additionally, the monthly report by ADP may show that employers in the US non-farm private sector added 165 000 new jobs during October, according to the median estimate by experts, following 154 000 new positions added in September. The latter has been the slowest employment growth since April, when the revised down 149 000 new jobs were reported. In case new job growth was higher than expected in October, this would have a moderate-to-strong bullish effect on the US dollar and a moderate-to-strong bearish effect on gold. The official figure is scheduled to be released at 12:15 GMT.

Meanwhile, investor medium-term rate hike expectations moderated.

According to CME’s FedWatch Tool, as of November 1st, market players saw a 7.2% chance of a rate hike occurring at the Federal Reserve’s policy meeting today, or unchanged compared to the prior business day, and a 73.6% chance of a hike in December, down from 78.0% in the preceding business day. As far as the February 1st 2017 meeting is concerned, the probability of such a move was seen at 75.2% on November 1st, down from 78.9% in the prior business day.

Daily, Weekly and Monthly Pivot Levels

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

R1 – $1,289.5
R2 – $1,291.0
R3 (Range Resistance – Sell) – $1,292.6
R4 (Long Breakout) – $1,297.1
R5 (Breakout Target 1) – $1,302.5
R6 (Breakout Target 2) – $1,304.8

S1 – $1,286.5
S2 – $1,285.0
S3 (Range Support – Buy) – $1,283.4
S4 (Short Breakout) – $1,278.9
S5 (Breakout Target 1) – $1,273.5
S6 (Breakout Target 2) – $1,271.2

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

Central Pivot Point – $1,274.1
R1 – $1,288.1
R2 – $1,299.4
R3 – $1,313.4
R4 – $1,327.4

S1 – $1,262.8
S2 – $1,248.8
S3 – $1,237.5
S4 – $1,226.2

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

Central Pivot Point – $1,279.6
R1 – $1,316.1
R2 – $1,359.0
R3 – $1,395.5
R4 – $1,431.9

S1 – $1,236.7
S2 – $1,200.2
S3 – $1,157.3
S4 – $1,114.3