Gold prices are modestly lower in early trading Thursday, after notching another six-month high overnight. Some mild profit taking and also chart consolidation from recent price gains are featured. April gold was last down $2.10 at $1,368.40 an ounce. Spot gold was last quoted up $11.10 at $1,361.00. May Comex silver last traded down $0.083 at $21.275 an ounce.

In overnight developments, there was another downbeat economic report coming out of China Thursday. China’s industrial output rose by 8.6%, year-on-year, in the January and February period. That’s lower than the 9.5% rise that was expected and down from a rise of 9.7% in December. While the above numbers are considered by the market place to be a “miss,” most other industrialized nations would love to have economic readings like that. What the market place is noticing is that the rate of economic growth in China is gradually easing. Traders and investors are also a bit concerned about China’s credit and financial system, given the recent bond default by a Chinese corporation—the first one ever. Gold has seen safe-haven buying due to the uncertainty of the aforementioned matters in China.

The U.S. dollar index fell to a 4.5-month low overnight, which also is an underlying bullish factor for the precious metals.

The Russian troop occupation of Ukraine is still a concern among traders and investors. U.S. and European Union leaders are threatening to impose economic and diplomatic sanctions on Russia. Meantime, Russia said it will do the same to the U.S. and EU. A referendum from Crimean citizens on secession is scheduled for Sunday, and that could be the next flashpoint in the region. It would not be surprising to see keener risk-aversion in the market place on Friday, heading into an uncertain weekend for Ukraine. The Russian occupation of Crimea has also been a bullish factor for the gold market.

U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export price indexes, manufacturing and trade inventories, and retail sales.

Wyckoff’s Daily Risk Rating: 7.0 (The Ukraine situation remains a significant geopolitical risk in the market place, while China’s economic and financial conditions are also a worry.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,371.00 versus the P.M. fixing of $1,366.00.

Technically, April gold futures prices are in a 2.5-month-old uptrend on the daily bar chart and have just hit a six-month high. The gold bulls have the near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,400.00. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,326.60. First resistance is seen at the overnight high of $1,375.70 and then at $1,380.00. First support is seen at $1,360.00 and then at $1,355.00.  

May silver futures bears have the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.00. First resistance is seen at the overnight high of $21.48 and then at $21.65. Next support is seen at $21.00 and then at $20.63.

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