Gold trading outlook: futures hold gains in European trade, as Donald Trump becomes the 45th US President

On Tuesday (in GMT terms) gold for delivery in December traded within the range of $1,273.3-$1,291.5. Futures closed at $1,274.5, edging down 0.38% compared to Monday’s close. It has been the 199th drop in the past 376 trading days and also a second consecutive one. The daily low has been a level not seen since October 31st, when a low of $1,271.9 a troy ounce was registered. The precious metal has trimmed its advance to 0.11% 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 1.86% on Wednesday to trade at $1,298.2 per troy ounce. The precious metal went up as high as $1,338.3 during late Asian trade, while the current daily low was at $1,268.1 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 0.19% on the day at a level of 97.67, after going down as low as 95.91 earlier. The latter has been the lowest level for this index since October 4th. The gauge has extended its slump to 0.76% so far in November, following a 3.18% advance in October.

Risk aversion dominated market sentiment on Wednesday, pushing gold prices to six-week highs, as Republican Donald Trump has been elected the 45th President of the United States, an outcome which confounded investor expectations. Media such as CNN and NBC reported that Democrat Hillary Clinton called Trump in order to concede the presidency.

Trump emerged victorious by winning 276 electoral votes against 218 for Clinton. It became clear the Republican achieved victories in several key battleground states such as Florida, North Carolina and Ohio.

The USD/MXN exotic pair surged to an all-time high of 20.7801 following the news. CAD, NZD, AUD, crude oil and stocks also retreated sharply.

Meanwhile, medium-term investor rate hike expectations continued to increase.

According to CME’s FedWatch Tool, as of November 8th, market players saw a 76.5% chance of a rate hike occurring at the Federal Reserve’s policy meeting in December, up from 71.5% in the prior business day, and a 77.8% chance of a hike in February 2017, up from 73.3% in the preceding business day. As far as the March 15th 2017 meeting is concerned, the probability of such a move was seen at 79.7% on November 8th, up from 74.5% 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 – $1,276.2
R2 – $1,277.8
R3 (Range Resistance – Sell) – $1,279.5
R4 (Long Breakout) – $1,284.5
R5 (Breakout Target 1) – $1,290.4
R6 (Breakout Target 2) – $1,292.7

S1 – $1,272.8
S2 – $1,271.2
S3 (Range Support – Buy) – $1,269.5
S4 (Short Breakout) – $1,264.5
S5 (Breakout Target 1) – $1,258.6
S6 (Breakout Target 2) – $1,256.3

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

Central Pivot Point – $1,295.2
R1 – $1,318.6
R2 – $1,332.6
R3 – $1,356.0
R4 – $1,379.3

S1 – $1,281.2
S2 – $1,257.8
S3 – $1,243.8
S4 – $1,229.7

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