On Monday (in GMT terms) gold for delivery in December traded within the range of $1,313.80-$1,331.50. Futures closed at $1,319.30, shedding 0.28% compared to Friday’s close. It has been the 161st drop in the past 301 trading days and also a second consecutive one. The daily low has been the lowest price level since July 21st (a low of $1,312.80), while the latter has been a level unseen since June 29th. The commodity has increased its advance to 0.79% so far during the current month, after surging 8.53% in June.
On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were advancing 0.82% on Tuesday to trade at $1,330.15 per troy ounce. The precious metal went up as high as $1,331.95 during early European trade, while the current daily low was at $1,321.30 per troy ounce, recorded during the mid 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 edging down 0.34% on the day at a level of 96.95, after going down as low as 96.90 earlier. On Monday the index touched 97.62, or a level unseen since March 10th. The gauge has trimmed its gain to 0.80% so far during the current month, following a 0.33% increase in June.
Today gold trading may be influenced by the monthly survey by Markit Economics on US services sector conditions. Activity in US services probably increased at a faster rate in July from a month ago, with the corresponding preliminary Purchasing Managers’ Index coming in at a reading of 52.0, according to the median forecast by experts, from a final 51.4 in June. If expectations were met, this would be the highest PMI level since April, when the gauge came in at 52.8. In case a faster than-expected expansion in services sector activity is reported, this would have a moderate bullish effect on the US dollar and a moderate bearish effect on gold, as services contribute to a considerable portion of the US GDP. The preliminary reading by Markit is due out at 13:45 GMT.
A separate report may show that confidence among consumers in the United States lowered in July. The corresponding index probably came in at a reading of 95.8, according to market expectations, falling from 98.0 in June. The latter has been the highest level since October 2015, when a revised up index value of 99.1 was reported. In case the index fell more than anticipated, this would have a strong bearish effect on the US dollar and a strong bullish effect on gold, as lower confidence suggests a lesser willingness to spend and, respectively, a slower economic growth. The Conference Board research group is to publish the official index reading at 14:00 GMT.
Gold has added a bit over 25% to its value since the beginning of the year on the back of mounting expectations of further monetary policy accommodation by central banks worldwide in order to curb negative effects from the EU membership referendum last month. At the same time, Federal Reserves decision to hike borrowing costs further may be pushed back to the Banks policy meeting in December.
According to CME’s FedWatch Tool, as of July 25th, market players saw a 19.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, up from 15.1% in the prior business day, and a 22.3% chance of a hike in November, up from 16.9% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 51.9% on July 25th, up from 44.6% in the preceding business day. At the same time, the probability of a rate hike occurring at the Banks July 26th-27th meeting was estimated at 1.2% as of July 25th, down from 3.6% during the prior business day.
Meanwhile, silver futures for delivery in September were gaining 0.46% on the day to trade at $19.737 per troy ounce, after going up as high as $19.800 a troy ounce during the early phase of the European trading session, or the highest price level since July 19th.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily levels of importance for gold are presented as follows:
R1 – $1,320.92
R2 – $1,322.55
R3 (Range Resistance – Sell) – $1,324.17
R4 (Long Breakout) – $1,329.04
R5 (Breakout Target 1) – $1,334.72
R6 (Breakout Target 2) – $1,337.07
S1 – $1,317.68
S2 – $1,316.06
S3 (Range Support – Buy) – $1,314.43
S4 (Short Breakout) – $1,309.57
S5 (Breakout Target 1) – $1,303.88
S6 (Breakout Target 2) – $1,301.53
By using the traditional method of calculation, the weekly levels of importance for gold are presented as follows:
Central Pivot Point – $1,324.47
R1 – $1,336.13
R2 – $1,349.17
R3 – $1,360.83
R4 – $1,372.50
S1 – $1,311.43
S2 – $1,299.77
S3 – $1,286.73
S4 – $1,273.70
In monthly terms, for the yellow metal we have the following pivots:
Central Pivot Point – $1,293.13
R1 – $1,380.87
R2 – $1,443.33
R3 – $1,531.07
R4 – $1,618.80
S1 – $1,230.67
S2 – $1,142.93
S3 – $1,080.47
S4 – $1,018.00