Gold trading outlook: futures hold ground, trading close to a 13-month high, as the FOMC meeting moves in focus

On Monday gold for delivery in April traded within the range of $1,259.70-$1,272.30. Futures closed at $1,268.80, rising 0.34% on a daily basis. It has been the 17th gain in the past 26 trading days and also a fourth consecutive one. Gold has added 3.32% to its value so far in March.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in April were edging up 0.39% on Tuesday to trade at $1,273.80 per troy ounce. The precious metal went up as high as $1,275.70 during the early phase of the European trading session, while the current daily low was at $1,264.30 per troy ounce, recorded during early Asian trade.

Last Friday market players seemed to have boosted their holdings of the precious metal, after it became clear the average earnings per hour in the United States recorded an unexpected 0.1% drop in February, following a 0.5% surge in January. February’s drop in earnings has been the first one since December 2014. The employment data string urged market players to reassess their expectations regarding the future hike in borrowing costs by the Federal Reserve. The probability of a March rate hike remained at zero on Monday, according to the CME Groups Fed Watch tool, on Monday there was a 0% probability that the Fed will hike rates at its meeting on March 15th-16th. The chance of such a scenario was estimated to have been 24.6% prior to the release of the official government employment numbers. At the same time, the CME Group said there was a 31.6% probability that the next rate hike may occur in June, or an increase from a 25.7% chance, as reported on Friday.

Gold showed a limited reaction to weaker-than-expected trade data from China, released earlier on Tuesday. The General Administration of Customs of the People’s Republic of China reported that the nations trade surplus shrank to USD 32.59 billion in February, while market expectations pointed to a lesser drop (to USD 50.15 billion). In January the Chinese trade surplus was at the amount of USD 63.30 billion, or the largest on record. Total exports and total imports dropped considerably more than anticipated in February, by 25.4% year-on-year and 13.8% year-on-year, respectively. February marked the 8th consecutive month of export decline and also the steepest one since May 2009. It also marked the 15th straight month of lower imports due to falling commodity prices and insufficient demand. China is the second largest consumer of gold worldwide behind India.

Meanwhile, silver futures for delivery in March were inching up 0.06% on the day to trade at $15.685 per troy ounce, after going up as high as $15.765 during early Asian trade. On Monday silver registered a daily high of $15.795 per troy ounce, or the highest level since February 12th (a high of $15.845).

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,266.77
R1 – $1,273.83
R2 – $1,279.37
R3 – $1,286.43

S1 – $1,261.23
S2 – $1,254.17
S3 – $1,248.63

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

Central Pivot Point – $1,256.13
R1 – $1,293.67
R2 – $1,317.43
R3 – $1,354.97

S1 – $1,232.37
S2 – $1,194.83
S3 – $1,171.07