Gold trading outlook: futures ease off the highest price since the Crimean crisis, economic data ahead

Gold futures were lower during early trade in Europe today. US stocks slid yesterday, even though the US posted some encouraging data. More key reports will be released later today.

Gold futures for delivery in August traded for $1 312.7 per troy ounce at 7:44 GMT on the COMEX in New York today, down 0.65%. Daily high and low stood at $1 320.3 and $1 305.4 per troy ounce, respectively. The contract added 0.22% yesterday, reaching a two-month high at $1 326.6 per troy ounce, after a further 0.14% gain on Monday.

Meanwhile, silver contracts for July stood at $20.790 per troy ounce, for a drop of 1.20%. Daily high and low were at $20.935 and $20.705 per troy ounce, respectively. The contract added 0.61% yesterday to reach a three-month high of $21.170 per troy ounce, after dropping 0.16% on Monday.

“Despite the situation in Iraq, the gold price has struggled to improve significantly,” Ric Spooner, chief market analyst at CMC Markets in Sydney, said for Bloomberg today. “Traders will be concerned about the potential for profit taking if upward momentum does not resume in the near future.”

US reports

The US will post key economic data today. Durable goods orders for May are projected to stand for a 0.2% monthly growth, while core orders, which exclude transportation items, are set to add 0.4% on a monthly basis. Meanwhile, the final reading on GDP for Q1 will be revealed, and analysts forecast a figure of -1.8% annual growth.

Later, Markit will post its preliminary reading on US services PMI for June. Experts suggest a standing of 58.6 after 58.1 in May. A reading of 50 or higher means expansion, and vice versa. The greater the distance from 50, the more sizable an expansion or contraction.

The services sector accounts for about 80% of US GDP.

Previously, the German Ifo institute posted slightly worsening business climate for July in the Eurozone yesterday, while the Conference Board released its reading on US consumer sentiment, for a sizable increase since June.

US housing data was also revealed yesterday. New home sales annualized rate in May stood for a massive 18.1% gain on a monthly basis, at 504 000 sales since a year ago, after Monday saw an increase for existing home sales as well. The real estate sector accounts for nearly 13% of US GDP.

Stocks

US stocks dropped yesterday, after reaching record highs last week on the Fed’s commitment to supporting the economy. S&P 500 dropped 0.64% during Tuesdays Wall Street session, Dow 30 logged a 0.70% loss, while Nasdaq 100 was down 0.15%. Dow Jones Euro Stoxx 50 closed for a 0.11% gain on Tuesday, and by 7:34 today was down 0.72%.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, were unchanged on Tuesday at 785.02 tons, after adding some 3 tons earlier. The fund lost more than 4 tons last week, and is orbiting multi-year lows amid a recovering US economy.

Technical view

According to Binary Tribune’s daily analysis, in case Gold August futures on the COMEX manage to breach the first resistance level at $1 327.1, the contract will probably continue up to test $1 332.9. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 339.2.

If the contract manages to breach the first key support at $1 315.0, it will probably continue to slide and test $1 308.7. With this second key support broken, the movement to the downside may extend to $1 302.9.

Meanwhile, silver futures for July will see their first resistance level at $21.205. If it is breached, the contract will meet next resistance at $21.368, and then the third level at $21.565.

Silver will find its first support point at $20.845. Should it be breached, the second level of support is estimated at $20.648 and the third at $20.485.