Commodity Market: Gold eases from one-week highs as USD looks set for first back-to-back weekly gains since May

Spot Gold eased from Thursday’s one-week high of $1,966.57 and traded within a tight range on Friday, as the US Dollar remained not far from its one-month peak supported by a tech stock rout this week.

“A rebound in the U.S. dollar index sent gold prices lower following the European Central Bank’s neutral tone last night,” Margaret Yang, market strategist at DailyFx, said.

“The mid- to-long-term outlook remains bullish for gold, despite recent consolidation. An ultra-loose monetary policy and low yield environment is cushioning the downside.”

The greenback was slightly weaker in mid-European session on Friday, following Thursday’s volatile US trade. Still, the dollar was set to register its first back-to-back weekly gains since May. Stronger US Dollar makes safe haven Gold costlier for holders of other currencies.

As of 9:40 GMT on Friday Spot Gold was inching down 0.05% to trade at $1,945.36 per troy ounce, while moving within a daily range of $1,937.24-$1,949.31. The precious metal has retreated 1.12% so far in September, following a 0.42% loss in August.

Meanwhile, Gold futures for delivery in December were retreating 0.51% on the day to trade at $1,954.30 per troy ounce, while Silver futures for delivery in December were down 0.96% to trade at $27.030 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.09% on Friday to 93.27, while being not far from Wednesday’s one-month high of 93.66.

In terms of macro data, Gold traders will be paying attention to the monthly report on US CPI inflation at 12:30 GMT today. The annualized consumer inflation in the country probably accelerated to 1.2% in August, according to market expectations, from 1.0% in July. The nation’s annualized core consumer inflation is expected to remain stable at 1.6% in August.

Meanwhile, near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of September 11th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on September 15th-16th, or unchanged compared to September 10th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,951.44
R1 – $1,961.40
R2 – $1,976.53
R3 – $1,986.49
R4 – $1,996.45

S1 – $1,936.31
S2 – $1,926.35
S3 – $1,911.22
S4 – $1,896.09