Gold prices are modestly higher in early U.S. trading Thursday as some safe-haven demand has surfaced heading into the weekend. Short covering is also featured. June gold was last up $5.50 at $1,293.30 an ounce. Spot gold was last quoted up $2.30 at $1,292.75. July Comex silver last traded up $0.102 at $19.24 an ounce.

The Russia-Ukraine situation could see tensions escalate this weekend as an independence referendum is scheduled to take place in a region of eastern Ukraine. This matter is still a potential geopolitical powder keg that the market place cannot ignore. Gold and U.S. Treasuries have seen some safe-haven buying in recent weeks, amid the heightened Russia-Ukraine conflict.

A feature in the market place last this week has been in the currency markets. The U.S. dollar index on Thursday morning hit a multi-month low, but then made a strong rebound by the end of the day and scored a technically bullish “key reversal” up, including follow-through buying on Friday, to begin to suggest the index has bottomed out. The Euro currency, meantime, saw prices hit a multi-month high on Thursday, and then post a bearish key reversal down, to suggest a market top is in place for the common currency. European Central Bank president Mario Draghi helped to precipitate the currency moves Thursday when he intimated he was not happy with the rising value of the Euro on the world currency markets, and said the ECB could act soon to stimulate European Union monetary policy. These developments combined are a potentially bearish underlying factor for the gold market and other raw commodity markets. Most major commodity markets worldwide are priced in U.S. dollars. When the value of the greenback rises on the foreign exchange market, it makes those raw commodities priced in dollars more expensive to purchase with other world currencies.

U.S. economic data due for release Friday is light and includes the monthly wholesale trade report.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are elevated.)

(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 $1,289.00 versus the previous P.M. fixing of $1,287.00.

Technically, June gold futures bears have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,315.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,268.40. First resistance is seen at Thursday’s high of $1,295.50 and then at $1,300.00. First support is seen at this week’s low of $1,284.80 and then at $1,280.00.  

July silver futures bears have the solid overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $19.77 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $18.685. First resistance is seen at the overnight high of $19.315 and then at $19.50. Next support is seen at the overnight low of $19.12 and then at $19.00.

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