Gold trading outlook: futures edge down a third day as markets await Yellen’s testimony

On Monday gold for delivery in August traded within the range of $1,280.50-$1,294.15. Futures closed at $1,290.95, edging down 0.12% compared to Friday’s close. It has been the 147th drop in the past 276 trading days and also a second consecutive one. The daily low has been an almost exact test of the low from June 17th. The commodity has trimmed its advance to 5.80% so far during the current month, following a 5.77% slump registered in May.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were down 0.43% on Tuesday to trade at $1,285.35 per troy ounce. The precious metal went up as high as $1,297.00 during early Asian trade, while the current daily low was at $1,283.00 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 down 0.14% on the day at a level of 93.55, after reaching 93.50 earlier, or its lowest level since June 9th. The index has extended losses to 2.41% so far in June, after advancing 3.04% in May.

Today the Fed Chair, Janet Yellen, is scheduled to testify before the Senate Banking Committee, while on Wednesday she is expected to speak before the House Financial Services Committee. Any remarks made in regard to how macroeconomic outlook could affect the central bank’s monetary policy have the potential to heighten USD and gold volatility, respectively.

Market participants are currently expecting a 12% probability of a rate hike occurring at the FOMC’s policy meeting next month, up from 8% a day ago, while the chance for such an event to occur in September was 33%, up from 24% a day earlier, according to CME Group’s FedWatch tool. As far as the FOMC meeting in December is concerned, the chance for a hike was estimated at 54%.

Meanwhile, silver futures for delivery in July were edging down 0.40% on the day to trade at $17.410 per troy ounce, after going down as low as $17.390 a troy ounce during the early phase of the European trading session.

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 – $1,288.53
R1 – $1,296.57
R2 – $1,302.18
R3 – $1,310.22

S1 – $1,282.92
S2 – $1,274.88
S3 – $1,269.27

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

Central Pivot Point – $1,293.97
R1 – $1,314.93
R2 – $1,337.37
R3 – $1,358.33

S1 – $1,271.53
S2 – $1,250.57
S3 – $1,228.13

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