Tuesday April 8, 2014 8:14 AM
(Kitco News) - Gold is posting decent price gains, hit a two-week high and is back above $1,300.00 in early U.S. trading Tuesday. The yellow metal is getting a boost from some safe-haven buying interest and by solid losses in the U.S. dollar index. June gold was last up $13.80 at $1,312.00 an ounce. Spot gold was last quoted up $13.50 at $1,311.00. May Comex silver last traded up $0.173 at $20.08 an ounce.
The Russia-Ukraine matter is back on the front burner of the market place Tuesday. Pro-Russian demonstrators in Ukraine are becoming more active. This situation could flare up quickly and once again become a geopolitical flash point. Gold is seeing a bit of fresh safe-haven demand due to the increase in Russia-Ukraine tensions. It’s not likely this matter will fade away and it’s more likely that it will escalate in the coming weeks. Such would be more bullish for the gold market.
The U.S. dollar index is under pressure early this week as the greenback bulls are fading again. If the dollar index continues to sink it would remain a bullish underlying factor for the precious metals markets.
Traders and investors are looking ahead to Wednesday afternoon’s release of the minutes of the latest meeting of the Federal Reserve’s Open Market Committee (FOMC). Data from the Fed have become key inflection points for the market place the past several months. Other than the monthly employment report from the Labor Department, it seems other U.S. economic data has become diminished in importance during the past several months.
U.S. economic data due for release Tuesday includes the IMF world economic outlook forecasts, NFIB small business index, and the weekly Goldman Sachs and Johnson Redbook retail sales reports. Federal Reserve officials are again on tap to speak Tuesday, which will garner the attention of the market place.
Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are moving closer to the front burner of the market place.)
(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 $1,314.75 versus the P.M. fixing of $1,299.00.
Technically, June Comex gold bears still have the overall near-term technical advantage. However, recent upside price action is a clue this market has put in a near-term low. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,320.00. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,277.40. First resistance is seen at today’s high of $1,314.70 and then at $1,320.00. First support is seen at $1,300.00 and then at Monday’s low of $1,295.80.
May silver futures bears have the near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.63 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.00. First resistance is seen at last week’s high of $20.23 and then at $20.50. Next support is seen at the overnight low of $19.85 and then at the March low of $19.575.
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