Gold trading outlook: futures rebound on Federal Reserve speaker remarks

On Monday gold for delivery in April traded within the range of $1,242.90-$1,256.20. Futures closed at $1,243.80, falling 0.80% on a daily basis. It has been the 18th drop in the past 36 trading days and also a second consecutive one. The daily low has been the lowest level since March 16th, when a low of $1,228.90 per troy ounce was recorded. Gold has advanced 2.01% so far in March, following two consecutive months of gains. In February the metal surged 10.52%.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in April were gaining 1.19% on Tuesday to trade at $1,258.60 per troy ounce. The precious metal went up as high as $1,260.80 during the early phase of the European trading session, while the current daily low was at $1,242.90 per troy ounce, recorded during early Asian trade.

Gold advanced to a daily high after earlier on Tuesday the Federal Reserve President for Atlanta, Dennis Lockhart, noted that US economy kept expanding almost in line with his expectations despite downside risks which have emerged since the beginning of 2016. “Summing up everything that had occurred since the beginning of the year through the March meeting there had been risk developments that might tilt the balance slightly to the downside,” Lockhart said, cited by Investing.com, “but the key thing is that the economy continues to perform substantially on the track that I expected last December when I voted for the liftoff decision.”

Meanwhile, the Federal Reserve President for San Francisco, John Williams, downplayed concerns that lower market-based measures of inflation suggest a fall in overall U.S. price measures. He noted that if incoming macroeconomic data supported the case for a rate hike, the Federal Reserve could still introduce such a move at the policy meetings in April and June.

Later in the day gold trading may be influenced by the preliminary results from Markit Economics monthly survey on US manufacturing. Manufacturing activity in the country probably increased at a faster rate in March, with the corresponding preliminary Purchasing Managers’ Index coming in at a reading of 51.8, according to market expectations. In February the final seasonally adjusted PMI stood at 51.3, improving from a preliminary 51.0. It has been the lowest PMI level since October 2012, when the index was reported at a final 51.0. Values above the key level of 50.0 indicate optimism (expanding activity). In case the flash manufacturing PMI showed a better-than-anticipated performance, this would have a moderate bullish effect on the US dollar and a moderate bearish effect on gold, respectively. The preliminary PMI reading by Markit is due out at 13:45 GMT.

Silver futures for delivery in May were gaining 1.01% on the day to trade at $15.980 per troy ounce, after going up as high as $16.020 a troy ounce during the early phase of the European trading session. It has been the highest price level since March 18th, when silver recorded a daily high of $16.170 per troy ounce.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,247.63
R1 – $1,252.37
R2 – $1,260.93
R3 – $1,265.67

S1 – $1,239.07
S2 – $1,234.33
S3 – $1,225.77

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

Central Pivot Point – $1,250.63
R1 – $1,273.27
R2 – $1,292.73
R3 – $1,315.37

S1 – $1,231.17
S2 – $1,208.53
S3 – $1,189.07