Gold trading outlook: futures trade little changed, close to fresh two-month lows, ahead of the ADP employment report

On Tuesday (in GMT terms) gold for delivery in December traded within the range of $1,312.0-$1,328.9. Futures closed at $1,316.5, retreating 0.80% compared to Monday’s close. It has been the 172nd drop in the past 327 trading days and also the steepest one since August 24th. The daily low has been a level unseen since June 28th. The precious metal has increased its slump to 3.02% 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 inching up 0.02% on Wednesday to trade at $1,316.8 per troy ounce. The precious metal went up as high as $1,319.2 during late Asian trade, while the current daily low was at $1,312.9 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 down 0.03% on the day at a level of 96.02, after going up as high as 96.16 earlier. The latter has been the highest level for this index since August 9th (96.47). The gauge has pared its advance to 0.24% so far during the current month, following a 0.74% retreat in July.

Today gold trading may be strongly influenced by the monthly report on non-farm private sector employment in the United States, which serves as a reliable predictor of the official government data on non-farm payrolls, due out on Friday. Employers in the US non-farm private sector probably added 175 000 new jobs during August, according to the median estimate by experts, following 179 000 new positions added in July. The latter has been the highest number of new jobs added since March, when a revised down figure of 194 000 was reported. In case new job growth was slower than expected in August, this would have a moderate-to-strong bearish effect on the US dollar and a moderate-to-strong bullish effect on gold. The official figure by Automated Data Processing Inc. (ADP) is scheduled to be released at 12:15 GMT.

Market players will be also paying a close attention to a statement, offered by the Fed President for Minneapolis and also a member to the Federal Open Market Committee, Neel Kashkari, at 12:00 GMT. Any remarks in regard to the central bank’s policy stance or the US economic outlook would heighten gold volatility.

According to CME’s FedWatch Tool, as of August 30th, market players saw a 24.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, up from 21.0% in the prior business day, and a 28.7% chance of a hike in November, up from 25.9% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 55.9% on August 30th, up from 54.2% in the preceding business day.

Meanwhile, silver futures for delivery in September were advancing 0.77% on the day to trade at $18.720 per troy ounce, after going up as high as $18.830 a troy ounce during the early 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 – $1,318.0
R2 – $1,319.6
R3 (Range Resistance – Sell) – $1,321.1
R4 (Long Breakout) – $1,325.8
R5 (Breakout Target 1) – $1,331.2
R6 (Breakout Target 2) – $1,333.5

S1 – $1,315.0
S2 – $1,313.4
S3 (Range Support – Buy) – $1,311.9
S4 (Short Breakout) – $1,307.2
S5 (Breakout Target 1) – $1,301.8
S6 (Breakout Target 2) – $1,299.5

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

Central Pivot Point – $1,331.9
R1 – $1,342.8
R2 – $1,359.7
R3 – $1,370.6
R4 – $1,381.5

S1 – $1,315.0
S2 – $1,304.1
S3 – $1,287.2
S4 – $1,270.3

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