Gold prices are moderately lower in early U.S. trading Wednesday. A bit of a “risk-on” trader and investor mentality is in the market place in the early going, which is a negative for the safe-haven yellow metal. June gold was last down $4.70 at $1,289.90 an ounce. Spot gold was last quoted down $5.30 at $1,289.50. July Comex silver last traded down $0.059 at $19.34 an ounce.

The somewhat keener investor risk appetite Wednesday morning is evidenced by the firmer U.S. stock indexes and weaker U.S. Treasury prices.

The economic highlight of the day and arguably of the week is the Wednesday afternoon release of the latest Federal Reserve Open Market Committee (FOMC) minutes. There are no major changes in monetary policy direction expected to be seen in the minutes. However, as always, analysts will be parsing the wording for clues on future moves by the U.S. central bank. Comments from a couple of Fed officials on Tuesday were deemed by the market place to be in the hawkish camp on U.S. monetary policy.

Recent falling U.S. Treasury bond yields are a concern to the market place, with some wondering if the U.S. is slipping back into economic recession. Bond yields are a powerful indicator of an economy’s health. It could be that the Federal Reserve is behind the curve in realizing any renewed weakness in the U.S. economy. However, this notion is far from being pervasive in the market place. The next couple months of data will go a long way in determining whether the U.S. economy remains on the upswing, or is on the downswing.

In other overnight news, Moody’s Investor Services cut its outlook on China’s property sector from stable to negative. The firm said it expects that sector of the Chinese economy to struggle in the next 12 months.

The Russia-Ukraine territorial crisis has not gone away, but there has been no major, fresh news on that front for a couple weeks. The Ukraine holds a presidential election on Sunday, which could produce new tension in the region. I would not be surprised to see that within the next week or so this situation flares up again to become a front-burner issue in the market place. Such would likely be a bullish development for U.S. Treasuries, the U.S. dollar and gold.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are still somewhat elevated, even though no new developments have occurred the past couple weeks.)

(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 $1,292.00 versus the previous P.M. fixing of $1,295.50.

Technically, June gold futures bulls and bears are still on a level near-term technical playing field. Prices are in a choppy and sideways trading range on the daily bar chart. That suggests this market could continue to trade sideways and choppy, in the range. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,315.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the May low of $1,272.00. First resistance is seen at today’s high of $1,296.30 and then at $1,300.00. First support is seen at this week’s low of $1,286.00 and then at $1,280.00.  

July silver futures bears have the overall near-term technical advantage. However, prices are “basing” at lower price levels, to begin to suggest a market bottom is in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $20.005 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $19.045. First resistance is seen at the overnight high of $19.50 and then at this week’s high of $19.685. Next support is seen at this week’s low of $19.225 and then at $19.045.

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