Gold prices are modestly higher in early U.S. trading Wednesday, as some more short covering and bargain hunting are featured following recent selling pressure. A weaker U.S. dollar index Wednesday is also supportive for the precious metals markets. June gold was last up $5.80 at $1,286.90 an ounce. Spot gold was last quoted up $2.80 at $1,287.00. May Comex silver last traded up $0.099 at $19.47 an ounce.

Key Chinese economic data out Wednesday saw the HSBC April manufacturing PMI come in at 48.3 in March versus 48.0 in April. A PMI reading below 50.0 suggests contraction in the sector. The market place has been concerned about a slowing pace of China economic growth in recent months—even though China’s economic numbers are the envy of all major industrial countries.

Meantime, the European Union’s flash services PMI for April was 52.5 versus 52.2 in March. The EU’s manufacturing PMI was 53.3 in April versus 53.0 in March. The U.S. flash PMI number is out Wednesday morning, too.

The Russia-Ukraine crisis had de-escalated early this week. However, at mid-week tensions are rising again after Ukraine accused pro-Russian separatists of torturing Ukraine citizens and shooting at a Ukrainian jet. U.S. Vice President Joe Biden was in Kiev Tuesday for talks with Ukrainian officials. He warned the Russians to back off.
This situation is likely flare up again to a front-burner matter in the market place, and likely sooner rather than later.

Reports Wednesday said demand for physical gold from Chinese consumers is picking up.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the flash manufacturing PMI, new residential sales and the weekly DOE energy stocks report.

Wyckoff’s Daily Risk Rating: 6.5 (The Russia-Ukraine tensions are still at least temporarily mostly on the back burner 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 fixing is $1,283.50 versus the previous P.M. fixing of $1,286.75.

Technically, June Comex gold bears have the firm near-term technical advantage. A five-week-old downtrend line is in place on the daily chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the April high of $1,331.40. Bears' next near-term downside breakout price objective is closing prices below technical support at $1,250.00. First resistance is seen at Tuesday’s high of $1,293.10 and then at $1,300.00. First support is seen at the overnight low of $1,282.10 and then at this week’s low of $1,275.80.  

May silver futures bears have the solid near-term technical advantage as prices hover near a 2.5-month low. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the April high of $20.40 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.00. First resistance is seen at the overnight high of $19.545 and then at this week’s high of $19.705. Next support is seen at the overnight low of $19.38 and then at last week’s low of $19.22.

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