Gold prices are firmer in early U.S. trading Friday, on a modest rebound from the solid losses Thursday that drove prices to a five-week low. Also, there is a bit more risk aversion in the market place Friday morning, heading into the weekend. August Comex gold was last up $4.80 at $1,295.30 an ounce. Spot gold was last quoted up $1.50 at $1,296.00. December Comex silver last traded up $0.068 at $20.54 an ounce.

There is some trepidation in the market place Friday morning, heading into a weekend that sees geopolitical tensions still high on at least a couple fronts. The U.S. stated late Thursday that Russian troops or pro-Russia rebels are shooting artillery shells at Ukraine targets from within Russia’s border. Meantime, the Israel-Hamas fighting continues to be intense. I suspect the risk aversion will increase as the day progresses Friday, as Monday morning could find significant new and possibly unsettling developments on the geopolitical front.

In overnight news, the German Ifo business indicator fell to 108.0 in July from 109.7 in June. A reading of 109.4 was expected. The downbeat report was blamed on German companies worrying about the Russia-Ukraine crisis that is playing out at present. The Euro currency saw some selling pressure after the Ifo report’s release.

A feature in the market place this week has been a rally in the U.S. dollar index that pushed the index to a six-week high in overnight trading. The greenback has been supported on safe-haven demand amid the geopolitical tensions, and on some recent upbeat U.S. economic data.

U.S. economic data due for release Friday includes durable goods orders.

Wyckoff’s Daily Risk Rating: 7.0 (Russia-Ukraine crisis and Irael-Hamas conflict are still front-burner matters for markets, heading into the weekend.)

(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 $1,292.50 versus the previous P.M. fixing of $1,292.75.

Technically, August gold futures bears have gained the near-term technical advantage as a two-week-old downtrend is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,325.90. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,278.00. First resistance is seen at $1,300.00 and then at Thursday’s high of $1,305.60. First support is seen at the overnight low of $1,291.00 and then at this week’s low of $1,287.50.  

December silver futures bears now have the slight near-term technical advantage as prices Thursday hit a four-week low. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $21.21 an ounce. The next downside price breakout objective for the bears is closing prices below major technical support at $20.00. First resistance is seen at $20.70 and then at $21.00. Next support is seen at this week’s low of $20.42 and then at $20.25.

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