Gold trading outlook: futures surge to new 4-week highs in cautious trade

On Friday gold for delivery in August traded within the range of $1,265.30-$1,278.00. Futures closed at $1,273.40, edging up 0.25% compared to Thursday’s close. It has been the 50th gain in the past 93 trading days and also a third consecutive one. The daily high has been the highest price level since May 17th, when a high of $1,281.60 was registered. In weekly terms, the precious metal appreciated 2.69% during the past week. It has been the 12th gain in the past 23 weeks, a second consecutive one and also the steepest one since the week ended on May 1st. The commodity has added 5.83% to its value so far during the current month, neutralizing the 5.77% slump registered in May.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were edging up 0.52% on Monday to trade at $1,287.15 per troy ounce. The precious metal went up as high as $1,287.65 during early European trade, or a level unseen since May 16th, while the current daily low was at $1,275.00 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 inching up 0.03% on the day at a level of 94.59, after reaching 94.83 earlier, or its highest level since June 3rd. The index has trimmed losses to 1.34% so far in June, after advancing 3.04% in May. Weaker dollar usually favors demand for gold and other dollar-denominated commodities, as they tend to become cheaper to holders of other currencies.

The Federal Open Market Committee is largely expected not to act on borrowing costs at the conclusion of its two-day policy meeting on Wednesday. Market participants are now viewing a mere 2% probability of a rate hike occurring on June 15th, while the chance for such a scenario to develop in July was estimated at 23%, according to CME Groups FedWatch tool. As far as the September policy meeting is concerned, the hike probability was 37%.

Meanwhile, silver futures for delivery in July were edging down 0.35% on the day to trade at $17.315 per troy ounce, after going down as low as $17.110 a troy ounce during the early phase of the Asian trading session. The latter has been the lowest price level for the commodity since June 9th, when a low of $16.950 a troy ounce was registered. In weekly terms, silver futures advanced 5.90% last week to mark their 13th gain in the past 23 weeks, a second consecutive one and also the steepest one since the week ended on April 17th.

Daily, Weekly and Monthly Pivot Levels

By employing the traditional calculation method, the daily pivot levels for gold are presented as follows:

Central Pivot Point – $1,272.23
R1 – $1,279.17
R2 – $1,284.93
R3 – $1,291.87

S1 – $1,266.47
S2 – $1,259.53
S3 – $1,253.77

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

Central Pivot Point – $1,262.63
R1 – $1,288.77
R2 – $1,304.13
R3 – $1,330.27

S1 – $1,247.27
S2 – $1,221.13
S3 – $1,205.77

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

Central Pivot Point – $1,239.40
R1 – $1,279.80
R2 – $1,344.80
R3 – $1,385.20

S1 – $1,174.40
S2 – $1,134.00
S3 – $1,069.00