On Tuesday gold for delivery in April traded within the range of $1,228.00-$1,236.00. Futures closed at $1,233.40, plummeting 0.88% on a daily basis. It has been the 15th drop in the past 32 trading days and also a third consecutive one. The daily low has been the lowest level since March 2nd, when a low of $1,226.00 per troy ounce was recorded. Gold has lost 0.19% of its value so far in March, following two consecutive months of gains.
On the Comex division of the New York Mercantile Exchange, gold futures for delivery in April were edging down 0.18% on Wednesday to trade at $1,231.20 per troy ounce. The precious metal went down as low as $1,230.30 during the early phase of the European trading session, while the current daily high was at $1,235.90 per troy ounce, recorded during early European trade as well.
Today gold trading may be strongly influenced by another data set coming out of the United States. The annualized consumer inflation in the United States probably decelerated to 0.9% in February, according to market expectations, from 1.4% in January. The latter has been the highest annual rate of consumer inflation since October 2014. At the same time, the annualized core consumer inflation, which is stripped of prices of food and energy, probably remained at 2.2% for a second consecutive month in February, according to expectations. It has been the highest core inflation since June 2012. If the general CPI tends to approach the inflation objective, set by the Federal Reserve and considered as providing price stability, or a level below but close to 2%, this will usually bolster the appeal of the US dollar and have a strong bearish effect on gold, respectively, as it heightens the probability of monetary policy tightening. The Bureau of Labor Statistics is to release the official CPI report at 12:30 GMT.
A separate report may show industrial output in the United States shrank at a monthly rate of 0.3% in February, according to market expectations, following a 0.9% expansion in January. The latter has been the first increase in six months and also the sharpest one since November 2014, when output grew 1.3% month-over-month. A larger-than-projected monthly decline in the index would usually have a moderate bearish effect on the US dollar and a moderate bullish effect on gold. The Board of Governors of the Federal Reserve is to release the production data at 13:15 GMT.
The Federal Open Market Committee (FOMC) is widely expected to keep the target for the federal funds rate at 0.500% at its two-day policy meeting, scheduled to be concluded today. In January the target range was left without change. Fed policy makers reiterated they anticipate only a gradual increase in borrowing costs, while they are watching closely the effects of global economic and financial developments on US outlook. At its December 2015 meeting the Committee raised borrowing costs by 25 basis points to the current 0.500% level for the first time in 55 policy meetings. The FOMC will announce its official decision on policy at 18:00 GMT. An unexpected rate hike would surely bolster demand for the US dollar, while the yellow metal would certainly see selling pressure. The rate decision will be followed by a press conference with the Fed Chair at 18:30 GMT. It will be closely examined by market participants and analysts for clues over the future path of interest rates.
Meanwhile, silver futures for delivery in May were edging down 0.26% on the day to trade at $15.260 per troy ounce, after going down as low as $15.205 a troy ounce during the early phase of the European trading session. It has been the lowest price level since March 10th, when silver recorded a daily low of $15.175 per troy ounce.
Daily and Weekly Pivot Levels
By employing the traditional calculation method, the daily pivot levels for gold are presented as follows:
Central Pivot Point – $1,232.47
R1 – $1,236.93
R2 – $1,240.47
R3 – $1,244.93
S1 – $1,228.93
S2 – $1,224.47
S3 – $1,220.93
By using the traditional method of calculation again, the weekly pivot levels for gold are presented as follows:
Central Pivot Point – $1,258.97
R1 – $1,280.43
R2 – $1,302.17
R3 – $1,323.63
S1 – $1,237.23
S2 – $1,215.77
S3 – $1,194.03
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