Gold trading outlook: futures climb to highs unseen since March 2014, as market players pile up to haven assets

On Tuesday gold for delivery in August traded within the range of $1,340.50-$1,359.85. Futures closed at $1,358.70, rising 0.49% compared to Monday’s close. It has been the 135th gain in the past 287 trading days and also a third consecutive one. The commodity has gained 4.02% so far during the current month, after advancing 8.71% in June.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in August were gaining 0.99% on Wednesday to trade at $1,372.15 per troy ounce. The precious metal went up as high as $1,373.70 during mid-Asian trade, or the highest price level since March 17th 2014, while the current daily low was at $1,357.50 per troy ounce, recorded during the early 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 inching up 0.05% on the day at a level of 96.32, after climbing as high as 96.55 earlier. The latter has been the highest level since June 28th. The index has neutralized earlier losses and is now up 0.12% so far during the current month, following a 0.33% gain in June.

The yellow metal is probably about to receive further support from prospects of additional easing measures by central banks worldwide as a response to the potential negative effects from Britain parting ways with the EU. Bank of England’s Financial Stability Report, released Tuesday, outlined risks of lower capital inflows to the UK. The central bank eased rules for lending institutions, so that they could cope with Brexit effects. BoE said it would reduce the amount of capital, that banks need to keep in reserve. According to BoE Governor, Mark Carney, such a decision reflected a “major change”, which would facilitate weathering the Brexit effects.

Today gold trading may be strongly influenced by the monthly survey on US services sector conditions. Data by the Institute for Supply Management may show that overall activity increased at a faster pace in June compared to May. The corresponding non-manufacturing PMI probably advanced to a reading of 53.3 in June, according to the median forecast by experts, from a level of 52.9 in May. The latter has been the lowest PMI reading since February 2014, when the gauge was reported at 51.6. In case the index accelerated at a faster rate than anticipated in June, this would provide a strong support to the US dollar and would be bearish for gold. The ISM is to release the official PMI reading at 14:00 GMT.

Market players will be also paying a close attention to a statements by several Fed officials for hints in regard to economic outlook and the Banks policy stance. At 12:00 GMT the Fed President for New York and also a FOMC member, William Dudley, is expected to speak, followed by FOMC member, Daniel Tarullo, at 14:00 GMT. Last but not least, at 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on June 14th-15th. Moderate-to-high USD volatility is usually present after this publication.

Meanwhile, silver futures for delivery in September were advancing 2.29% on the day to trade at $20.362 per troy ounce, after going up as high as $20.580 a troy ounce during the late phase of the Asian trading session.

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 – $1,353.02
R1 – $1,365.53
R2 – $1,372.37
R3 – $1,384.88

S1 – $1,346.18
S2 – $1,333.67
S3 – $1,326.83

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

Central Pivot Point – $1,331.60
R1 – $1,351.60
R2 – $1.364.20
R3 – $1,384.20

S1 – $1,319.00
S2 – $1,299.00
S3 – $1,286.40

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

Central Pivot Point – $1,297.02
R1 – $1,386.03
R2 – $1,451.47
R3 – $1,540.48

S1 – $1,231.58
S2 – $1,142.57
S3 – $1,077.13