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Gold trading outlook: futures edge up in proximity to 2.5-week highs as markets await a new set of data to provide clues on rates

On Wednesday (in GMT terms) gold for delivery in December traded within the range of $1,346.9-$1,357.6. Futures closed at $1,349.2, edging down 0.35% compared to Tuesday’s close. It has been the 174th drop in the past 332 trading days and also the first one since August 31st. The daily high has been a level unseen since August 19th, when a high of $1,357.9 was recorded. The precious metal has pared its advance to 2.88% so far during the current month, after losing 3.40% in August.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were edging up 0.21% on Thursday to trade at $1,352.1 per troy ounce. The precious metal went up as high as $1,353.9 during early European trade, while the current daily low was at $1,345.8 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 edging down 0.25% on the day at a level of 94.71, after going down as low as 94.69 earlier. The gauge has extended its drop to 1.37% so far in September, following a 0.54% advance in August.

Today gold trading may be influenced by the weekly report on lay-offs in the United States. The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on September 2nd, probably rose to 265 000, according to market consensus, from 263 000 in the preceding week. 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 US Department of Labor is to release the official numbers at 12:30 GMT.

Gold has recently gained ground, as the US dollar was pressured by a series of disappointing macroeconomic reports. On Tuesday the Institute for Supply Management (ISM) said that growth in US sector of services slowed down to its lowest level since February 2010. The respective Non-Manufacturing Purchasing Managers Index tumbled to a reading of 51.4 in August from 55.5 in July, while falling well short of market consensus (55.0). This added to the string of weaker-than-projected US manufacturing and employment data points, released in the past week, which eased expectations that a rate hike by the Fed may take place as early as September.

According to CME’s FedWatch Tool, as of September 7th, market players saw a 15.0% 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 20.2% chance of a hike in November, up from 18.5% in the preceding day. As far as the December meeting is concerned, the probability of such a move was seen at 46.9% on September 7th, up from 45.7% in the preceding business day.

Meanwhile, silver futures for delivery in December were advancing 0.73% on the day to trade at $19.992 per troy ounce, after going up as high as $20.020 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 – $1,350.2
R2 – $1,351.2
R3 (Range Resistance – Sell) – $1,352.1
R4 (Long Breakout) – $1,355.1
R5 (Breakout Target 1) – $1,358.5
R6 (Breakout Target 2) – $1,359.9

S1 – $1,348.2
S2 – $1,347.2
S3 (Range Support – Buy) – $1,346.3
S4 (Short Breakout) – $1,343.3
S5 (Breakout Target 1) – $1,339.9
S6 (Breakout Target 2) – $1,338.5

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

Central Pivot Point – $1,322.1
R1 – $1,338.6
R2 – $1,350.6
R3 – $1,367.1
R4 – $1,383.7

S1 – $1,310.1
S2 – $1,293.6
S3 – $1,281.6
S4 – $1,269.7

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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