Gold trading outlook: futures with a daily retreat, as Brexit panic eases, focus gradually shifts to Fed’s July meeting

On Wednesday gold for delivery in August traded within the range of $1,313.00-$1,330.75. Futures closed at $1,326.90, rising 0.88% compared to Tuesday’s close. It has been the 132nd gain in the past 283 trading days. The commodity has trimmed its advance to 8.67% so far during the current month, following a 5.77% slump registered in May.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were edging down 0.34% on Wednesday to trade at $1,322.35 per troy ounce. The precious metal went up as high as $1,323.10 during early European trade, while the current daily low was at $1,315.50 per troy ounce, recorded during the early phase of the European trading session as well.

The US Dollar Index, a gauge reflecting the relative strength of the greenback against a basket of 6 other major currencies, was inching up 0.09% on the day at a level of 95.78, after climbing as high as 95.97 earlier. The index has shed 0.15% so far in June, after surging 3.04% in May.

Today gold trading may be influenced by the weekly report on lay-offs in the United States. The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on June 24th, probably rose to 267 000, according to market consensus, from 259 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on June 3rd, when an unrevised level of 264 000 was 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.

Markets will be also paying a close attention to the statement by the Fed President for St. Louis and also a FOMC member, James Bullard. Any remarks made in regard to the US macroeconomic outlook, or the Bank’s future policy stance, would certainly boost USD volatility, especially amid the overall uncertainty, following the stunning UK vote on EU membership. Bullard is scheduled to speak at 17:30 GMT.

Two days ago, in a statement at the Chicago Council on Global Affairs, Federal Reserve Governor, Jerome Powell, expressed concerns that the British vote to part ways with the European Union could obstruct US growth at a moment when labor market momentum in the country might be showing signs of a slowdown. According to Powell, last Thursday’s referendum had shifted global risks “to the downside”, which could undermine Federal Reserve’s outlook.

Market players see a 0% chance of a rate hike by the Federal Reserve occurring at the policy meeting in July, CME’s Fed Watch tool showed. However, there is a 3% chance of a reduction in borrowing costs.

So far the UK has abstained from invoking Article 50, while outgoing Prime Minister David Cameron has already stated this would be a duty of the newly elected PM.

Meanwhile, silver futures for delivery in September were edging up 0.30% on the day to trade at $18.462 per troy ounce, after going up as high as $18.513 a troy ounce during the late phase of the Asian trading session. The latter has been an almost exact test of the high from June 29th (also a 22-month high).

Daily, Weekly and Monthly Pivot Levels

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

Central Pivot Point – $1,323.55
R1 – $1,334.10
R2 – $1,341.30
R3 – $1,351.85

S1 – $1,316.35
S2 – $1,305.80
S3 – $1,298.60

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

Central Pivot Point – $1,312.60
R1 – $1,372.25
R2 – $1.422.10
R3 – $1,481.75

S1 – $1,262.75
S2 – $1,203.10
S3 – $1,153.25

In monthly terms, for the yellow metal we have the following pivots:

Central Pivot Point – $1,239.40
R1 – $1,279.80
R2 – $1,344.80
R3 – $1,385.20

S1 – $1,174.40
S2 – $1,134.00
S3 – $1,069.00