Gold prices pushed sharply higher Monday, hitting a four-month high, on the weekend developments in already unstable Ukraine that saw Russian troops and armor move into the Crimea region. It’s a keen “risk-off” day in the market place Monday, and that is greatly benefitting safe-haven gold. To some, the Russian invasion was a surprise event. However, others could read the handwriting on the wall last week. April gold was last up $22.70 at $1,344.30 an ounce. Spot gold was last quoted up $15.80 at $1,345.00. May Comex silver last traded up $0.219 at $21.46 an ounce.

Many markets are seeing significant price reactions Monday, following the weekend Russian troop invasion of Crimea, which is a peninsula of Ukraine. Russian jets have also reportedly violated Ukrainian air space. World stock markets are under selling pressure, while the U.S. dollar index and U.S. Treasurieshave rallied. Crude oil and the grain markets have also pushed sharply higher Monday, as Ukraine and the Black Sea region are rich in natural resources and the Black Sea is a major export hub. Military conflict in the region would very likely disrupt shipping of any commodity coming out of the Black Sea.

The U.S. and other Western nations are gearing up for economic sanctions to be slapped on Russia. However, it is very unlikely the West would initiate any military action, despite Russian troops occupying a sovereign nation. Economic sanctions levied against an already unstable Russian economy would have major ramifications for Russia and those world companies that deal with Russia.

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• Uncertainty in Ukraine Providing Major Boost To Gold During Asian Session
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Russia’s central bank raised its key interest rate by 1% over the weekend to try to ward off further weakness of the already slumping Russian ruble on the world currency markets. It’s not a pleasant notion to imagine a tattered Russian economy whose military still possesses major stockpiles of nuclear weapons that rogue nations would pay up dearly to obtain. Indeed, the Russian situation overall is and likely will continue to be a bullish underlying factor for safe-haven gold for at least the near term and probably longer.

The country of Ukraine was already on the verge of financial collapse and needs funding soon from outside sources. The International Monetary Fund late last week was moving quickly to provide funding to the Ukrainian financial system. However, the Russian invasion of Crimea likely stalled that planning.

In other news overnight China’s manufacturing purchasing managers index (PMI) fell to an eight-month low in February, showing a reading of 50.2 from 50.5 in January.

U.S. economic data due for release Monday includes personal income and outlays, the U.S. manufacturing PMI, construction spending, the global manufacturing PMI, the ISM manufacturing report on business, and domestic auto sales. Friday is the release of the key U.S. employment report from the Labor Department.

Wyckoff’s Daily Risk Rating: 8.0 (The Russian aggression and the Ukraine uncertainty have keen risk aversion in the market place to start the new trading week.)

(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 $1,344.75 versus the P.M. fixing of $1,326.50.

Technically, April gold futures prices are in a two-month-old uptrend on the daily bar chart and prices have just hit another four-month high. The gold bulls still have the near-term technical advantage and gained more technical momentum Monday. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,360.00. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,318.70. First resistance is seen at the overnight high of $1,350.00 and then at $1,360.00. First support is seen at $1,340.00 and then at the overnight low of $1,330.70.  

May silver futures bulls have the slight overall near-term technical advantage, but need to show more power soon to keep it. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the February high of $22.18 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.67. First resistance is seen at the overnight high of $21.68 and then at $22.00. Next support is seen at the overnight low of $21.32 and then at $21.00

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