On Tuesday gold for delivery in August traded within the range of $1,210.50-$1,220.65. Futures closed at $1,219.20, going up 0.58% from Monday’s close. It has been the 41st gain in the past 85 trading days and also the first one in ten trading days. A day ago futures tested lows unseen since February 17th. The precious metal lost 5.43% of its value in May, following four consecutive months of advance. It has been the steepest monthly drop since November 2015.
On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were inching down 0.06% on Wednesday to trade at $1,218.50 per troy ounce. The precious metal went up as high as $1,222.35 during early Asian trade, while the current daily low was at $1,215.00 per troy ounce, recorded during the mid phase of the Asian trading session.
The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was edging down 0.26% on the day at a level of 95.58, after reaching 95.55 earlier. The index advanced 2.99% in May, rebounding after three consecutive monthly declines. Weaker dollar usually favors demand for gold and other dollar-denominated commodities, as they tend to become cheaper to holders of other currencies.
Today gold trading may be strongly influenced by the monthly survey on manufacturing sector development in the United States. Activity in the US manufacturing sector probably increased at a slower pace in May, with the corresponding manufacturing PMI coming in at a reading of 50.4, according to market expectations, down from 50.8 in April. If so, this would be the third consecutive month of expansion, which followed four successive months of contraction. A larger slowdown than projected would have a strong bearish effect on the dollar and a strong bullish effect on gold. The Institute for Supply Management is to release the official figure at 14:00 GMT.
A separate report by Markit Economics is expected to show that the final estimate of the Manufacturing Purchasing Managers’ Index for May confirmed the preliminary reading of 50.5, according to the median forecast by analysts. It has been the lowest PMI reading since September 2009. In April the final seasonally adjusted PMI stood at 50.8, confirming the preliminary reading. Values above the key level of 50.0 indicate predominant optimism (expanding activity). In case, however, the final PMI for May came in line with expectations or slowed down even further, this would lead to a moderate bearish impact on the US dollar and would be a bullish signal for gold. The final reading is due out at 13:45 GMT.
Meanwhile, silver futures for delivery in July were down 0.22% on the day to trade at $15.985 per troy ounce, after going down as low as $15.975 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 – $1,216.78
R1 – $1,223.07
R2 – $1,226.93
R3 – $1,233.22
S1 – $1,212.92
S2 – $1,206.63
S3 – $1,202.77
By using the traditional method of calculation again, the weekly pivot levels for gold are presented as follows:
Central Pivot Point – $1,223.93
R1 – $1,241.47
R2 – $1,269.13
R3 – $1,286.67
S1 – $1,196.27
S2 – $1,178.73
S3 – $1,151.07
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