On Wednesday (in GMT terms) gold for delivery in December traded within the range of $1,306.9-$1,319.2. Futures closed at $1,311.4, retreating 0.39% compared to Tuesday’s close. It has been the 173rd drop in the past 328 trading days and also a second consecutive one. The daily low has been a level unseen since June 24th, when a low of $1,253.7 was recorded. The precious metal lost 3.40% of its value 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 0.15% on Thursday to trade at $1,309.4 per troy ounce. The precious metal went up as high as $1,314.7 during early Asian trade, while the current daily low was at $1,307.2 per troy ounce, recorded during the early phase of the European 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 0.02% on the day at a level of 96.03, after going up as high as 96.24 earlier. Yesterday the index rose to 96.25, or its highest level since August 9th (96.47). The gauge added 0.54% to its value in August after a 0.74% retreat in July.
Today gold trading may be strongly influenced by the Institute for Supply Managements monthly survey on manufacturing sector conditions in the United States. Activity in the sector probably increased at a slower pace in August, with the corresponding manufacturing PMI coming in at a reading of 52.0, according to market expectations, down from 52.6 in July. If so, this would be the sixth consecutive month of expansion, which followed four successive months of contraction. Readings above the key level of 50.0 are indicative of optimism (expanding activity). In case, however, the PMI slowed down more than anticipated in August, this would have a strong bearish effect on the US dollar and a strong bullish effect on gold. The ISM is to release the official reading at 14:00 GMT.
A separate report by the US Department of Labor may show that the number of people in the country, who filed for unemployment assistance for the first time during the business week ended on August 26th, probably rose to 265 000, according to market consensus, from 261 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on July 15th, when the revised down 252 000 claims were 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. The weekly report is due out at 12:30 GMT.
Market players will be also paying a close attention to a statement, offered by the Fed President for Cleveland and also a member to the Federal Open Market Committee, Loretta Mester, at 16:25 GMT. Any remarks in regard to the central bank’s policy stance or the US economic outlook would heighten gold volatility.
Yesterday gold futures tumbled to fresh 2-month lows, after Automated Data Processing Inc. (ADP) reported employers in the US non-farm private sector added 177 000 new jobs in August, while outstripping the market consensus (175 000). In July job growth was revised up to 194 000 (179 000 previously), or the highest since March. The upbeat data added to the case of an early interest rate hike by the Federal Reserve Bank.
According to CME’s FedWatch Tool, as of August 31st, market players saw a 24.0% chance of a rate hike occurring at the Federal Reserve’s policy meeting in September, or unchanged compared to the prior business day, and a 30.3% chance of a hike in November, up from 28.7% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 53.6% on August 31st, down from 55.9% in the preceding business day.
Meanwhile, silver futures for delivery in December were edging up 0.11% on the day to trade at $18.727 per troy ounce, after going up as high as $18.852 a troy ounce during the mid 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 – $1,312.5
R2 – $1,313.7
R3 (Range Resistance – Sell) – $1,314.8
R4 (Long Breakout) – $1,318.2
R5 (Breakout Target 1) – $1,322.1
R6 (Breakout Target 2) – $1,323.7
S1 – $1,310.3
S2 – $1,309.1
S3 (Range Support – Buy) – $1,308.0
S4 (Short Breakout) – $1,304.6
S5 (Breakout Target 1) – $1,300.7
S6 (Breakout Target 2) – $1,299.1
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 – $1,330.8
R1 – $1,354.8
R2 – $1,398.1
R3 – $1,422.1
R4 – $1,446.0
S1 – $1,287.5
S2 – $1,263.5
S3 – $1,220.2
S4 – $1,176.8
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