Gold trading outlook: futures mark time not far from recent lows, as markets eye the FOMC Minutes, US data string

On Tuesday (in GMT terms) gold for delivery in December traded within the range of $1,205.6-$1,220.9. Futures closed at $1,211.2, edging up 0.12% compared to Monday’s close. It has been the 180th gain in the past 386 trading days and also a second consecutive one. In weekly terms, gold futures lost 1.27% of their value during the past week. It has been the 21st drop in the past 46 weeks and also a second one in a row. The precious metal has trimmed its slump to 4.86% 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 inching up 0.03% on Wednesday to trade at $1,211.6 per troy ounce. The precious metal went up as high as $1,214.7 during mid-Asian trade, while the current daily low was at $1,209.6 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 edging up 0.13% on the day at a level of 101.22, after going up as high as 101.27 earlier. Last Friday the index climbed as high as 101.54, or its highest level since March 2003. The gauge has pared its advance to 2.84% so far in November, following a 3.18% surge in October.

Gold futures were little changed in early European trade on Wednesday, after demonstrating a modest rebound from 5.5-month lows in the past two trading days, as the US Dollar pulled back from recent 13.5-year highs.

Today market players will be paying a close attention to a vast string of macroeconomic reports coming out of the United States, including initial jobless claims, durable goods orders, preliminary data on manufacturing activity by Markit Economics, final data on consumer sentiment by Reuters/University of Michigan and new home sales.

Additionally, market focus will be set on the Minutes from the Federal Open Market Committees policy meeting held on November 1st-2nd, as the release could provide insight on how the Banks monetary policy tightening cycle may develop in the future.

The FOMC left the target range for the federal funds rate intact between 0.25% and 0.50% for a seventh consecutive meeting in November, in line with market expectations. As noted in the FOMC Statement, labor market conditions have continued to improve and economic activity growth has accelerated in comparison with the pace shown throughout H1 2016. Policy makers again reiterated that the case for a rate hike continued to gain strength. A rather hawkish view, presented in the document, would bolster demand for the US Dollar and would also mount massive selling pressure on dollar-priced commodities such as gold.

Meanwhile, medium-term investor rate hike expectations were little changed near highs unseen in more than a year.

According to CME’s FedWatch Tool, as of November 22nd, market players saw a 93.5% chance of a rate hike occurring at the Federal Reserve’s policy meeting in December, down from 95.4% in the prior business day, and a 93.9% chance of a hike in February 2017, down from 95.6% in the preceding business day. As far as the March 15th 2017 meeting is concerned, the probability of such a move was seen at 94.7% on November 22nd, down from 96.3% 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 – $1,212.6
R2 – $1,214.0
R3 (Range Resistance – Sell) – $1,215.4
R4 (Long Breakout) – $1,219.6
R5 (Breakout Target 1) – $1,224.5
R6 (Breakout Target 2) – $1,226.6

S1 – $1,209.8
S2 – $1,208.4
S3 (Range Support – Buy) – $1,207.0
S4 (Short Breakout) – $1,202.8
S5 (Breakout Target 1) – $1,197.9
S6 (Breakout Target 2) – $1,195.8

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

Central Pivot Point – $1,214.4
R1 – $1,227.4
R2 – $1,246.2
R3 – $1,259.2
R4 – $1,272.3

S1 – $1,195.6
S2 – $1,182.6
S3 – $1,163.8
S4 – $1,145.1

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