Gold prices are posting good gains and scored a three-week high in early U.S. trading Thursday, boosted on safe-haven buying amid risk aversion in the market place, and on a slumping U.S. dollar index. Technical buying is also featured Thursday morning as buy stop orders have been triggered in gold futures. August Comex gold was last up $14.10 at $1,287.20 an ounce. Spot gold was last quoted up $8.90 at $1,287.00. July Comex silver last traded up $0.267 at $20.004 an ounce.

Traders and investors are still digesting Wednesday afternoon’s Federal Open Market Committee meeting statement and a press conference from Fed Chair Janet Yellen.
Most market watchers expected the FOMC announcement that it would continue to taper its monthly bond-buying program, also called quantitative easing, by another $10 billion. Markets took the FOMC statement in stride, but Yellen’s comments at her press conference rallied stock and bond markets. While not surprising, Yellen reassured the market place that U.S. interest rates are not going to be raised any time soon. There were a few market watchers wondering if Yellen might sound just a bit more hawkish on U.S. monetary policy after a surprisingly hot reading for the May U.S. consumer price index that was released earlier this week.

The U.S. dollar index is posting solid losses and hit a four-week low Thursday morning in the wake of the dovishly construed comments from Yellen. Meantime, crude oil prices are higher and hovering near their recent multi-month highs. These two key “outside markets” are in a daily bullish posture for the precious metals Thursday.

The civil war in Iraq remains a major market factor and continues to prompt some risk aversion among traders and investors, and in turn some safe-haven buying in gold. The U.S. said it is mulling its military options on the Iraqi matter. Crude oil prices are rallying on worries about Iraqi crude oil exports being reduced, and on concerns the violence in Iraq could spread to other Arab nations.

U.S. economic data due for release Thursday includes the weekly jobless claims report, leading economic indicators and the Philadelphia Fed business survey.

Wyckoff’s Daily Risk Rating: 6.5 (Violence and civil war in Iraq has the world market place concerned.)

(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 $1,282.00 versus the previous P.M. fixing of $1,269.75.

Technically, August gold futures bears have the overall near-term technical advantage. However, the bulls are making a good move to start to suggest an uptrend can be sustained. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at this week’s low of $1,258.00. First resistance is seen at $1,290.00 and then at $1,300.00. First support is seen at the overnight low of $1,276.20 and then at Wednesday’s low of $1,266.50.  

July silver futures hit a nine-week high Thursday and bulls have gained good technical momentum. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the April high of $20.43 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $19.435. First resistance is seen at Thursday’s high of $20.06 and then at $20.25. Next support is seen at the overnight low of $19.83 and then at Wednesday’s low of $19.665.

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