Commodity Market: Gold trades near one-week lows as US Dollar hits a 19-week peak

Spot Gold traded little changed in proximity to Thursday’s one-week low on Friday and was poised to register its first weekly loss in three weeks, as recent upbeat US macro data and accelerating vaccine roll-outs pushed the US Dollar to highs not seen since mid-November.

An official government data showed yesterday that the number of people filing for unemployment benefits for the first time had decreased to a one-year low last week.

Additionally, after an initial 100-million-dose objective was achieved ahead of schedule, US President Joe Biden now set another goal – to administer 200 million doses of COVID-19 vaccines during his first 100 days in office.

“Gold is a victim of the kind of recovery that we could be potentially seeing in the U.S. dollar … Better recovery unfolds so that’s driving flows into U.S. assets and pushing the dollar higher and that’s what’s really weighing on gold at the moment,” IG market analyst Kyle Rodda, was quoted as saying by Reuters.

As of 9:14 GMT on Friday Spot Gold was inching up 0.05% to trade at $1,727.53 per troy ounce, while moving within a daily range of $1,723.27-$1,729.88 per troy ounce. Yesterday it slipped as low as $1,721.84 per troy ounce, which has been its weakest price level since March 18th ($1,719.25 per troy ounce). The precious metal looked set to register its first week of losses in three, being down 1.02%. Gold has edged down 0.39% so far in March, following another 6.14% drop in February.

Meanwhile, Gold futures for delivery in April were inching up 0.01% on the day to trade at $1,725.20 per troy ounce, while Silver futures for delivery in May were up 0.77% to trade at $25.240 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.06% to 92.795 on Friday, while easing from yesterday’s 19-week high of 92.917.

In terms of macroeconomic data, today Gold traders will be paying attention to the February report on US personal income, personal spending and Core PCE inflation due out at 12:30 GMT as well as to the final data on US consumer sentiment for March due out at 14:00 GMT.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of March 26th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on April 27th-28th, or unchanged compared to March 25th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,731.34
R1 – $1,740.84
R2 – $1,755.03
R3 – $1,764.53
R4 – $1,774.03

S1 – $1,717.16
S2 – $1,707.66
S3 – $1,693.47
S4 – $1,679.28