Gold trading outlook: futures tumble to a fresh four-week low on stronger USD as sentiment improves

On Thursday (in GMT terms) gold for delivery in December traded within the range of $1,251.9-$1,292.5. Futures closed at $1,266.4, edging down 0.56% compared to Wednesday’s close. It has been the 201st drop in the past 378 trading days and also a fourth consecutive one. The daily low has been a level not seen since October 17th, when a low of $1,251.1 a troy ounce was registered. The precious metal has neutralized earlier gains and is now down 0.53% so far during the current month, after losing 3.34% in October.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were losing 1.03% on Friday to trade at $1,253.4 per troy ounce. The precious metal went up as high as $1,265.0 during early Asian trade, while the current daily low was at $1,250.4 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 inching up 0.04% on the day at a level of 98.83, after going up as high as 98.93 earlier. Yesterday the index climbed to 99.08, or its highest level since October 25th. The gauge has increased its advance to 0.45% so far in November, following a 3.18% surge in October.

Gold futures retreated for a fifth straight trading day on Friday, reaching a fresh four-week low, on improving market sentiment and stronger US Dollar.

Today gold trading may be influenced by the monthly survey on consumer sentiment by Thomson Reuters/University of Michigan. The preliminary reading of the corresponding index, which usually comes out two weeks ahead of the final data, probably rebounded to 87.5 during the current month from a final 87.2 in October. In case the gauge of consumer sentiment met or even exceeded expectations in November, this would have a moderate-to-strong bullish effect on the US Dollar and would pressure gold further. The preliminary reading is due out at 15:00 GMT.

Additionally, market players will be paying a close attention to the public appearance of Federal Reserve Vice Chairman, Stanley Fischer, who is scheduled to speak on U.S. Monetary Policy and the Global Economy at the 20th Annual Conference of the Central Bank of Chile in Santiago, Chile at 14:00 GMT.

Meanwhile, medium-term investor rate hike expectations were little changed.

According to CME’s FedWatch Tool, as of November 10th, market players saw a 71.5% chance of a rate hike occurring at the Federal Reserve’s policy meeting in December, or unchanged compared to the prior business day, and a 73.3% chance of a hike in February 2017, up from 72.7% in the preceding business day. As far as the March 15th 2017 meeting is concerned, the probability of such a move was seen at 75.6% on November 10th, down from 76.4% in the prior business day.

Daily, Weekly and Monthly Pivot Levels

By employing the Camarilla calculation method, the daily levels of importance for gold are presented as follows:

R1 – $1,270.1
R2 – $1,273.8
R3 (Range Resistance – Sell) – $1,277.6
R4 (Long Breakout) – $1,288.7
R5 (Breakout Target 1) – $1,301.8
R6 (Breakout Target 2) – $1,307.5

S1 – $1,262.7
S2 – $1,259.0
S3 (Range Support – Buy) – $1,255.2
S4 (Short Breakout) – $1,244.1
S5 (Breakout Target 1) – $1,231.0
S6 (Breakout Target 2) – $1,225.3

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

Central Pivot Point – $1,295.2
R1 – $1,318.6
R2 – $1,332.6
R3 – $1,356.0
R4 – $1,379.3

S1 – $1,281.2
S2 – $1,257.8
S3 – $1,243.8
S4 – $1,229.7

In monthly terms, for the yellow metal we have the following pivots:

Central Pivot Point – $1,279.6
R1 – $1,316.1
R2 – $1,359.0
R3 – $1,395.5
R4 – $1,431.9

S1 – $1,236.7
S2 – $1,200.2
S3 – $1,157.3
S4 – $1,114.3