On Friday (in GMT terms) gold for delivery in December traded within the range of $1,335.0-$1,362.0. Futures closed at $1,357.5, surging 1.22% compared to Thursday’s close. It has been the 144th gain in the past 305 trading days and also a fourth consecutive one. The daily high has been the highest price level since July 11th. In weekly terms, the yellow metal added 1.95% to its value during the past week. It has been the 17th gain in the past 30 weeks. The commodity surged 2.86% in July, after gaining 8.53% in June.
On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were edging down 0.13% on Monday to trade at $1,355.7 per troy ounce. The precious metal went up as high as $1,358.8 during early Asian trade, while the current daily low was at $1,353.3 per troy ounce, recorded during the early phase of the Asian 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 edging up 0.12% on the day at a level of 95.64, after going up as high as 95.69 earlier. On Friday the index tumbled to 95.33, or its lowest level since June 24th. The gauge fell 0.70% in July, following two consecutive months of gains.
Today gold trading may be strongly influenced by the monthly survey on manufacturing sector conditions in the United States. Activity in the sector probably increased at a slower pace in July, with the corresponding manufacturing Purchasing Managers Index coming in at a reading of 53.0, according to market expectations, down from 53.2 in June. If so, this would be the fifth consecutive month of expansion, which followed four successive months of contraction. June’s PMI level has been the highest one since February 2015. Readings above the key level of 50.0 are indicative of expanding activity in the sector. In case, however, the PMI slowed down more than anticipated in July, this would have a strong bearish effect on the US dollar and a strong bullish effect on gold. The Institute for Supply Management (ISM) is to release the official reading at 14:00 GMT.
On Friday gold rose sharply after the preliminary report by the US Department of Commerce revealed that economy expanded at an annualized rate of 1.2% during the second quarter of 2016, falling short of market expectations of a 2.6% growth. In Q1 the US real Gross Domestic Product grew 0.8%, a revision down from 1.1% previously. According to the preliminary data, in Q2 positive contributions to the GDP came from personal consumption expenditures (PCE) and exports, while negative contributions came from private inventory investment, non-residential fixed investment, residential fixed investment, state and local government expenditures. In case this slowdown in growth is confirmed by the second and the final estimates, due to be released in the coming months, the Federal Reserve may have a strong case to further delay an increase in the target range for the federal funds rate.
According to CME’s FedWatch Tool, as of July 29th, market players saw a 12.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, down from 18.0% in the prior business day, and a 12.0% chance of a hike in November, down from 19.7% during the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 33.0% on July 29th, down from 42.7% in the preceding business day.
Meanwhile, silver futures for delivery in September were advancing 1.01% on the day to trade at $20.553 per troy ounce, after going up as high as $20.695 a troy ounce during the late phase of the Asian trading session.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily levels of importance for gold are presented as follows:
R1 – $1,360.0
R2 – $1,362.5
R3 (Range Resistance – Sell) – $1,364.9
R4 (Long Breakout) – $1,372.4
R5 (Breakout Target 1) – $1,381.0
R6 (Breakout Target 2) – $1,385.0
S1 – $1,355.0
S2 – $1,352.6
S3 (Range Support – Buy) – $1,350.1
S4 (Short Breakout) – $1,342.7
S5 (Breakout Target 1) – $1,334.0
S6 (Breakout Target 2) – $1,330.0
By using the traditional method of calculation, the weekly levels of importance for gold are presented as follows:
Central Pivot Point – $1,346.3
R1 – $1,373.2
R2 – $1,389.0
R3 – $1,415.9
R4 – $1,442.9
S1 – $1,330.5
S2 – $1,303.6
S3 – $1,287.8
S4 – $1,272.1
In monthly terms, for the yellow metal we have the following pivots:
Central Pivot Point – $1,348.5
R1 – $1,386.5
R2 – $1,415.4
R3 – $1,453.4
R4 – $1,491.4
S1 – $1,319.5
S2 – $1,281.5
S3 – $1,252.6
S4 – $1,223.6
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