Gold prices are not straying too far from unchanged levels in early U.S. trading Monday, after hitting a four-month low in overnight trading. There is a lack of major, markets-moving fundamental news in the market place at present, but that could change in the coming days. A heavy slate of worldwide economic data comes out this week, which is likely to impact the markets. August Comex gold was last up $1.10 at $1,247.10 an ounce. Spot gold was last quoted down $5.20 at $1,246.50. July Comex silver last traded up $0.118 at $18.80 an ounce.

In overnight news, the Euro currency was under more selling pressure to start the trading week, which in turn has given a boost to the U.S. dollar index. The European Union’s May manufacturing PMI came in at 52.2 versus 53.4 in April. The figure was just a bit weaker than market expectations and helped to pressure the Euro. Focus is turning to Thursday’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. Such would be another bearish below to the Euro currency.

Meantime, there was upbeat economic data from China released during the weekend. China’s manufacturing purchasing managers index (PMI) came in at 50.8 in May versus 50.4 in April. Any reading above 50.0 suggests expansion. That news gave a lift to Asian and European stock markets, and is a positive for most raw commodity markets. China is the world’s top consumer of raw commodities.

The big U.S. data point of the week is Friday’s Labor Department employment situation report for May. The early forecast is for non-farm payrolls to have increased 215,000 in the report.

U.S. economic data due for release Monday includes the U.S. manufacturing PMI, construction spending, and the ISM manufacturing report on business.

Wyckoff’s Daily Risk Rating: 5.5 (The Russia-Ukraine crisis has not escalated and the rest of the world is quieter regarding geopolitics.)

(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 $1,244.75 versus the previous P.M. fixing of $1,250.50.

Technically, August gold futures bears have the firm near-term technical advantage. A 10-week-old downtrend line is in place on the daily bar chart. However, the market is 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 $1,268.50. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,220.00. First resistance is seen at the overnight high of $1,251.00 and then at Friday’s high of $1,260.60. First support is seen at the overnight low of $1,241.10 and then at $1,235.00.  

July silver futures bears have the solid overall near-term technical advantage after prices Friday hit a contract low. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last 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 $18.00. First resistance is seen at $19.00 and then at $19.155. Next support is seen at the contract low of $18.615 and then at $18.50.

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