Gold prices are posting good gains and hit a two-week high in early U.S. trading Thursday, boosted by perceptions of a more dovish U.S. Federal Reserve, some safe-haven demand and a weaker U.S. dollar index. June gold was last up $17.60 at $1,323.50 an ounce. Spot gold was last quoted up $11.30 at $1,324.00. May Comex silver last traded up $0.51 at $20.28 an ounce.

The market place is still digesting Wednesday afternoon’s release of the minutes of the latest meeting of the Federal Reserve’s Open Market Committee (FOMC). The U.S. stock indexes and gold rallied and the U.S. dollar index sold off in the wake of that report. Traders and investors looked at the FOMC minutes and decided the last FOMC meeting, combined with recent remarks from Fed Chair Janet Yellen, paint a picture that is decidedly more dovish than they had earlier reckoned. Most now believe it will be a longer period of time before the Fed starts to raise its interest rates. More money in the U.S. banking system (quantitative easing) is bullish for the U.S. stock market and also bullish for raw commodities due to the inflationary implications.

In overnight news, China’s latest trade data again disappointed the market place. March exports were down 6.6% year-on-year, while imports fell 11% in the same period. Part of the decline in exports was blamed on companies over-inflating their invoices on exports last year. This news is a bearish underlying factor for the raw commodity sector, as China is the world’s largest raw commodity importer.

A Greece government bond auction Thursday has garnered very good investor demand, reports said. The market place perceives Greece to be on sounder economic and political footing—even though a report was released Thursday showing the Greek unemployment rate at 26.7% in January.

U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export price indexes, the monthly Treasury budget statement, and ICSC chain store sales trends.

The Russia-Ukraine tensions are still on the minds of traders and investors this week. Pro-Russian demonstrators in Ukraine have become more active recently. The NATO secretary-general on Thursday called on Russia to withdraw its troops from the Ukraine border and stop making trouble. This situation could flare up quickly and once again become a geopolitical flash point.  Gold would likely see safe-haven demand increase on any escalation of this conflict.
The U.S. dollar index has taken a beating this week and fell to a three-week low overnight. The eroding greenback is a bullish underlying factor for the raw commodity sector, including the precious metals.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are moving closer to the front burner of the market place.)

(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 $1,321.50 versus the P.M. fixing of $1,301.75.

Technically, June Comex gold bears still have the overall near-term technical advantage. However, the bulls are making a move and recent upside price action is one clue this market has put in a near-term low. 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 last week’s low of $1,277.40. First resistance is seen at $1,325.00 and then at $1,330.00. First support is seen at the overnight low of $1,311.00 and then at $1,300.00.  

May silver futures hit a three-week high overnight and the bulls might be making a move. Bears still have the near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.63 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of $19.575. First resistance is seen at the overnight high of $20.32 and then at $20.50. Next support is seen at $20.00 and then at the overnight low of $19.86.

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