Gold trading outlook: futures distance from 2-week lows as the US Dollar Index is set to break a six-day streak of gains

On Tuesday gold for delivery in June traded within the range of $1,258.70-$1,268.35. Futures closed at $1,266.00, inching up a mere 0.03% from Monday’s close. It has been the 37th gain in the past 70 trading days. The daily low has been the lowest price level since April 28th, when a low of $1,238.50 was recorded. The precious metal has dropped 1.14% so far during the current month, following four consecutive months of advance.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were gaining 0.63% on Wednesday to trade at $1,273.95 per troy ounce. The precious metal went up as high as $1,276.05 during late Asian session, while the current daily low was at $1,266.00 per troy ounce, recorded during early Asian trade.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was edging down 0.14% on the day at a level of 94.04. Yesterday the index climbed to as high as 94.33, or a level unseen since April 28th, after which it closed at 94.22 to mark its sixth consecutive day of gains. Stronger dollar usually pressures demand for gold and other dollar-denominated commodities, as they tend to become more expensive to holders of other currencies.

In technical terms, gold seemed to have recently encountered resistance at the 38.2% Fibonacci level ($1,274.64), reflecting the descent from May 2nd high to May 10th low and, at present, the price is holding between the hourly 100-period and the hourly 200-period Exponential Moving Averages. A break and close above it clears the way for a test of the 50.0% ($1,280.30) and the 61.8% ($1,285.80) Fibonacci levels.

Meanwhile, silver futures for delivery in July were gaining 1.23% on the day to trade at $17.340 per troy ounce, after going up as high as $17.380 a troy ounce during the late phase of the Asian trading session. Yesterday the commodity tested lows unseen since April 26th, tumbling to $16.925 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 – $1,264.35
R1 – $1,270.00
R2 – $1,274.00
R3 – $1,279.65

S1 – $1,260.35
S2 – $1,254.70
S3 – $1,250.70

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

Central Pivot Point – $1,289.37
R1 – $1,307.93
R2 – $1,322.97
R3 – $1,341.53

S1 – $1,274.33
S2 – $1,255.77
S3 – $1,240.73