On Thursday (in GMT terms) gold for delivery in December traded within the range of $1,351.2-$1,361.5. Futures closed at $1,357.2, rising 0.62% compared to Wednesday’s close. It has been the 152nd gain in the past 319 trading days. The precious metal has trimmed its slump to a mere 0.02% so far in August, after surging 2.86% in July.
On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were edging down 0.39% on Friday to trade at $1,351.9 per troy ounce. The precious metal went up as high as $1,357.9 during early Asian trade, while the current daily low was at $1,350.4 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 0.31% on the day at a level of 94.40, after going up as high as 94.52 earlier. Yesterday it fell to 94.05, or a level unseen since June 24th. The gauge has trimmed its slump to 1.05% so far during the current month, following a 0.74% retreat in July.
On Thursday gold retreated from recent two-week highs on the back of US Dollars rebound, following hawkish remarks by the Fed President for San Francisco, John Williams. He noted that a too long stand-by period for borrowing costs could harm US economy. “In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later,” Feds Williams said, cited by CNBC. “If we wait until we see the whites of inflations eyes, we dont just risk having to slam on the monetary policy brakes, we risk having to throw the economy into reverse to undo the damage of overshooting the mark. And that creates its own risks of a hard landing or even a recession.”
The Fed President for New York, William Dudley, and the Fed President for Atlanta, Dennis Lockhart, have also recently expressed their support of the view that the central bank needs to return to an expected run of gradual interest rate increases, as the US economy seems to be faring well.
The Minutes from the FOMCs policy meeting in July, released Wednesday, revealed that policy makers left the door open for a hike by the end of 2016, depending on incoming macroeconomic data. However, the document underscored a division of opinions concerning the need to remove policy accommodation, which seemed to have mounted pressure on the US dollar earlier this week.
According to CME’s FedWatch Tool, as of August 18th, market players saw a 15.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, unchanged compared to the prior business day, and a 20.2% chance of a hike in November, up from 15.0% during the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 46.9% on August 18th, down from 47.4% in the preceding business day. A prolonged low-rate environment tends to support demand for haven assets such as gold.
Meanwhile, silver futures for delivery in September were retreating for a third consecutive trading day, down 0.96% to trade at $19.550 per troy ounce, after going down as low as $19.510 a troy ounce during the mid phase of the European 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 – $1,358.1
R2 – $1,359.1
R3 (Range Resistance – Sell) – $1,360.0
R4 (Long Breakout) – $1,362.9
R5 (Breakout Target 1) – $1,366.2
R6 (Breakout Target 2) – $1,367.5
S1 – $1,356.3
S2 – $1,355.3
S3 (Range Support – Buy) – $1,354.4
S4 (Short Breakout) – $1,351.5
S5 (Breakout Target 1) – $1,348.2
S6 (Breakout Target 2) – $1,346.9
By using the traditional method of calculation, the weekly levels of importance for gold are presented as follows:
Central Pivot Point – $1,347.4
R1 – $1,359.4
R2 – $1,375.7
R3 – $1,387.7
R4 – $1,399.8
S1 – $1,331.1
S2 – $1,319.1
S3 – $1,302.8
S4 – $1,286.6
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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