Gold trading outlook: futures retreat a fourth straight day ahead of Fed officials’ statements

On Wednesday gold for delivery in June traded within the range of $1,273.00-$1,290.00. Futures closed at $1,284.55, edging down 0.48% from Tuesday’s close. It has been the 31st drop in the past 65 trading days, a third consecutive one and also the steepest one since April 22nd, when the yellow metal lost 1.63% of its value. The daily low has been the lowest price level since April 29th, when a low of $1,267.20 was recorded. The precious metal has tumbled 0.95% so far during the current month, following four consecutive months of advance. In April it added 4.46% to its value.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were losing 0.52% on Thursday to trade at $1,277.90 per troy ounce. The precious metal went up as high as $1,285.15 during the late phase of the Asian trading session, while the current daily low was at $1,276.00 per troy ounce, recorded during early European trade.

Today the precious metal may be influenced by the weekly report on US initial jobless claims. The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on April 29th, probably increased to 260 000, according to market consensus, from 257 000 in the preceding week. If expectations were met, this would be the highest number of claims since the business week ended on April 1st, when a revised down 266 000 claims were reported. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar and a moderate bullish effect on gold. The Department of Labor is to release the official report at 12:30 GMT.

Market players will be also paying a close attention on the statements by a number of Fed officials later in the day in search of hints over how the Banks policy tightening cycle will develop in the future. At 15:30 GMT the Federal Reserve President for St. Louis, James Bullard, is expected to take a statement at Santa Barbara Countys Economic Summit, while at 23:15 GMT the Fed President for San Francisco and also a FOMC member, John Williams, is scheduled to speak at Hoover Institutions International Monetary Stability Conference.

As can be observed on the hourly time frame below, the commodity is about to test again the 38.2% Fibonacci level ($1,274.39), which reflects the ascent from April 22nd low to May 2nd high, after the recent downswing was halted in the area between the 38.2% and the 50.0% Fibonacci levels yesterday. If gold overcomes that key level, the next support may be expected at the hourly 200-period Exponential Moving Average ($1,270.81). A break and close below it may target the low from April 29th ($1,267.20). Resistance, on the other hand, may be encountered at the hourly 55-period EMA ($1,282.28) and then – at the high from May 4th ($1,290.00).

Meanwhile, silver futures for delivery in July were losing 0.51% on the day to trade at $17.410 per troy ounce, after going down as low as $17.340 a troy ounce during the early phase of the European trading session.

Daily and Weekly Pivot Levels

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

Central Pivot Point – $1,282.52
R1 – $1,292.03
R2 – $1,299.52
R3 – $1,309.03

S1 – $1,275.03
S2 – $1,265.52
S3 – $1,258.03

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

Central Pivot Point – $1,272.10
R1 – $1,312.60
R2 – $1,336.00
R3 – $1,376.50

S1 – $1,248.70
S2 – $1,208.20
S3 – $1,184.80