Gold prices are modestly higher in subdued early U.S. trading Tuesday. Some safe-haven demand is still present in the market place, evidenced not only by the firmer gold prices but also by a stronger U.S. dollar and higher U.S. Treasury prices. December Comex gold was last up $3.20 at $1,312.50 an ounce. Spot gold was last quoted up $0.80 at $1,311.75. December Comex silver last traded up $0.014 at $20.175 an ounce.

There are still geopolitical hotspots in the world that have the attention of the market place: civil war in Iraq, in which the U.S. has just injected military force; the Russia-Ukraine tensions; and the Israel-Hamas fighting. While the market place this week appears to be more or less numb to those hotspots, any flare-up will likely jolt traders and investors back into a keener risk-averse posture.

This is the time of year called “the dog days of summer,” which also typically find market participants less interested in trading and more interested in taking their vacations or summer outings before the unofficial end of summer and before school begins. This lackluster trading environment could last until the first week in September.

In overnight news, the German ZEW economic expectations index declined to 8.6 in August from 27.1 in July, for the eighth straight monthly decline. Geopolitical tensions, namely the Russia-Ukraine crisis, have dampened economic growth prospects in Europe the past few months.  Economic data coming out of the European Union has been generally downbeat recently.

U.S. economic data due for release Tuesday includes the NFIB index of small business optimism, the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the monthly Treasury budget statement.

Wyckoff’s Daily Risk Rating: 6.0 (The market place early this week is less focused on the still-simmering geopolitical matters: the Russia-Ukraine crisis, Iraq and the Gaza strip.)

(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 $1,311.00 versus the previous P.M. fixing of $1,307.25.

Technically, gold bulls and bears are on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,328.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the August low of $1,281.00. First resistance is seen at $1,315.00 and then at $1,320.00. First support is seen at the overnight low of $1,306.80 and then at $1,300.00.  

December silver futures bears have the near-term technical advantage as prices are in a five-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.70 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.50. First resistance is seen at $20.25 and then at $20.35. Next support is seen at $20.00 and then at Monday’s low of $19.92.

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