Commodity Market: Gold eases from one-month highs, but still on track for third consecutive week of gains

Having touched a one-month high of $1,896.32 on Thursday, Spot Gold eased during European trade on Friday, but was still poised to register its third successive week of gains due to growing optimism over further stimulus measures in the United States.

Congressional Republicans and Democrats scrambled to pass a new round of coronavirus relief yesterday, as failure to reach an agreement is no longer an option amid a relentless surge in new COVID-19 infections.

Meanwhile, a panel of outside advisers to a US regulator approved emergency use of Moderna Inc’s coronavirus vaccine.

On the political front, British PM Johnson’s office said that trade negotiations with the European Union were in a “serious situation” and no deal would be secured if the bloc did not change its position substantially. In light of recent developments, Bank of England kept policy on hold yesterday.

As of 10:14 GMT on Friday Spot Gold was edging down 0.37% to trade at $1,878.60 per troy ounce, while moving within a daily range of $1,877.49-$1,886.79 per troy ounce. The yellow metal looked set for its third consecutive week of gains, being up 2.17%. The commodity has gained 5.79% so far in December, following a 5.43% slump in November, or its biggest since November 2016.

Meanwhile, Gold futures for delivery in February were edging down 0.34% on the day to trade at $1,884.00 per troy ounce, while Silver futures for delivery in March were down 0.84% to trade at $25.962 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 up 0.09% to 89.90 on Friday, while hovering just above Thursday’s 32-month low of 89.73.

In terms of macroeconomic data, today Gold traders will be paying attention to the quarterly report on US current account due out at 15:30 GMT.

Additionally, several Federal Reserve officials are expected to make speeches.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of December 18th, 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 January 26th-27th, or unchanged compared to December 17th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,881.33
R1 – $1,900.53
R2 – $1,915.52
R3 – $1,934.72
R4 – $1,953.92

S1 – $1,866.34
S2 – $1,847.14
S3 – $1,832.16
S4 – $1,817.17