Gold prices are modestly lower in early U.S. trading Friday. Technical selling has been the feature this week as the charts for both gold and silver remain firmly in the bearish camp. However, the recent downside price pressure may have exhausted the gold and silver bears, for the time being. June Comex gold was last down $2.80 at $1,253.50 an ounce. Spot gold was last quoted down $2.50 at $1,254.00. July Comex silver last traded down $0.004 at $19.01 an ounce.

Friday is the last trading day of the week and of the month, making it an extra important day for the markets, from at least a technical standpoint. It’s a significant development, from a chart perspective, when a market’s price closes at or near its weekly, monthly or quarterly high or low.

Trading was again quieter overnight in Europe and Asia, with many markets pausing as focus is turning to next week’s monthly monetary policy meeting of the European Central Bank. It’s widely believed the ECB will announce further monetary policy stimulus measures at that meeting. Recent weak European Union economic data and fears of deflation setting in for the EU are solid reasons for the ECB to make a move next week.

Markets are also awaiting key manufacturing data from China to be released over the weekend and which could impact the market place on Monday. China’s official manufacturing purchasing managers index is due out.

U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine crisis has not escalated and the rest of the world is quieter regarding geopolitics. However, the falling U.S. Treasury yields may be a harbinger of trouble ahead.)

(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 $1,254.00 versus the previous P.M. fixing of $1,255.00.

Technically, June gold futures bears have the firm near-term technical advantage. A six-week-old downtrend line is in place on the daily bar chart. However, the market is now short-term oversold and due for at least an upside corrective bounce very soon. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,277.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at Thursday’s high of $1,260.60 and then at Wednesday’s high of $1,267.30. First support is seen at $1,250.00 and then at $1,240.00.

July silver futures bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance this week’s high of $19.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $18.685. First resistance is seen at the $19.155 and then at $19.25. Next support is seen at the overnight low of $18.94 and then at this week’s low of $18.78.

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