Gold trading outlook: futures little changed ahead of FOMC rate decision

On Monday gold for delivery in December traded within the range of $1,163.80-$1,170.00. Futures closed at $1,167.00, rising 0.25% on a daily basis, following three consecutive trading days of losses. On Friday the commodity went up as high as $1,178.70 per troy ounce, or the highest price level since October 20th, when a daily high of $1,179.10 was registered. In weekly terms, gold futures lost 1.72% last week, marking their first drop in the past three weeks, and also the most significant one since the week ended on August 30th, when the commodity plunged 2.29%.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were losing 0.04% for the day to trade at $1,165.70 per troy ounce. The yellow metal overshot the lower range breakout level (R4), as it slipped as low as $1,162.40 earlier today. It has been the lowest level since October 13th, when a daily low of $1,154.90 was reached.

An array of US macroeconomic data is to be released later on Tuesday, which may have a considerable impact on gold futures.

Durable goods orders in the United States probably dropped for a second straight month in September, down at a monthly rate of 1.1%, according to the median forecast by experts. In August orders were 2.3% lower from a month ago, a revision down from a 2.0% drop reported previously. It has been the sharpest monthly decline since December 2014, when orders were down 3.7%. At the same time, durable goods orders, which exclude transportation, probably remained flat for a second straight month in September, according to expectations, following four successive months of increases. In case the general index decreased at a faster-than-projected pace, this would have a strong bearish effect on the US dollar and would be a bullish signal for gold. The US Census Bureau is scheduled to release the official report at 12:30 GMT.

Meanwhile, confidence among consumers in the United States was probably little changed in October, with the corresponding index coming in at a reading of 102.9, according to expectations, from 103.0 in September. The latter has been the highest index value since January, when the gauge was reported at 103.8. 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 lower 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.

Tomorrows focus will be on the outcome of the Federal Open Market Committees two-day policy meeting. Market expectations point that the target range for the federal funds rate will be left without change for a 54th consecutive meeting. Policymakers have recently indicated that the necessary macroeconomic conditions for the first rate hike in almost a decade were not yet present, but were approaching.

Daily and Weekly Pivot Levels

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

R1 – $1,167.57
R2 – $1,168.14
R3 (range resistance) – $1,168.71
R4 (range breakout) – $1,170.41

S1 – $1,166.43
S2 – $1,165.86
S3 (range support) – $1,165.30
S4 (range breakout) – $1,163.59

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

Central Pivot Point – $1,168.57
R1 – $1,173.83
R2 – $1,184.37
R3 – $1,189.63

S1 – $1,158.03
S2 – $1,152.77
S3 – $1,142.23