Gold prices are moderately lower in early U.S. trading Monday, on technically related selling and amid a higher U.S. dollar index. Serious near-term chart damage has been inflicted on the gold market recently. April gold was last down $11.00 at $1,325.00 an ounce. Spot gold was last quoted down $10.90 at $1,324.50. May Comex silver last traded down $0.10 at $20.21 an ounce.

In overnight news, the China HSBC preliminary purchasing managers’ index dropped to an eight-month low of 48.1 in March from 48.5 in February. This continues a trend of weaker-than-expected economic data coming out of China and raises the question: Will China move to use monetary stimulus to boost its economy?  The spate of weaker data from China has been a bearish underlying factor for many raw commodity markets, including the precious metals.

Meantime, the European Union’s March manufacturing flash PMI came in at 53.2 versus expectations of a 53.3 reading and a February figure of 53.3. A PMI reading below 50.0 suggests contraction and above 50.0 suggests growth. European stock markets were pressured in part on the China PMI news. However, Asian stock markets appeared little affected on the weaker China data and showed gains. European stock markets are still unnerved by Russia’s annexation of the Crimea region of Ukraine last week.

The Ukraine-Russia conflict is still on the radar screen of the market place. Russian troops over-ran Ukrainian military bases during the weekend. President Obama is in Europe and China this week drumming up international support for more sanctions on Russia. A Group of Seven meeting is scheduled to take place Monday on the Russia-Ukraine matter. Any significant escalation of tensions between Ukraine and Russia would quickly put keener risk-aversion into the market place and would likely benefit safe-haven gold.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the U.S. flash manufacturing purchasing managers’ index.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has for the moment de-escalated but is still an unsettling market factor.)

(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 $1,322.00 versus the P.M. fixing of $1,336.00.

Technically, The gold bulls and bears are on a level near-term technical playing field. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,350.00. Bears' next near-term downside breakout price objective is closing prices below technical support at $1,300.00. First resistance is seen at the overnight high of $1,335.70 and then at Friday’s high of $1,343.00. First support is seen at last week’s low of $1,320.80 and then at  $1,310.00.  

May silver futures are weaker and hit a fresh six-week low overnight. The bears have the near-term technical advantage. A four-week-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $21.50 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 $20.315 and then at $20.585. Next support is seen at the overnight low of $20.10 and then at $20.00.

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