Gold prices are sporting good gains and hit a six-month high in early U.S. trading Wednesday. More safe-haven buying and an increasingly bullish technical posture are prompting buying interest in the yellow metal. April gold was last up $14.40 at $1,361.10 an ounce. Spot gold was last quoted up $11.10 at $1,361.00. May Comex silver last traded up $0.205 at $21.02 an ounce.

The Russian troop occupation of Ukraine is still a serious concern among traders and investors at mid-week. The Group of Seven nations is set to release a statement later Wednesday to reiterate its solidarity regarding opposing Russia’s invasion of Ukraine. It’s likely that the G-7 will soon impose official economic and diplomatic sanctions on Russia. A referendum from Crimean citizens on secession is scheduled for Sunday, and that could be the next flashpoint in the region. The Russian occupation of Crimea has been a bullish factor for the safe-haven gold market.

In other overnight news, industrial production in the European Union fell by 0.2% in January, from December, and was up 2.1% year-on-year. The decline in EU output was unexpected and could have an influence on the European Central Bank’s monetary policy. The ECB has been battling tepid EU economic growth and deflationary concerns with a very stimulative monetary policy.

While gold and the raw commodity sector have fared well in the first quarter of 2014, the copper market has seen its price fall dramatically the past week. Comex copper futures prices hit a nearly four-year low Wednesday. Part of the selling pressure on copper comes from concerns about weakening Chinese economic growth. Crude oil prices have also been pressured in part by the concerns about a weakening Chinese economy. China is the world’s largest copper consumer. Copper is a major industrial metal worldwide. And many veteran stock market watchers say copper’s price move can be a harbinger of price action in the U.S. stock market. Concern about the health of the Chinese economy has weighed down the Asian and European stock markets this week. The fact gold has been able to make gains this week, despite the above circumstances, is impressive.

U.S. economic data due for release Wednesday is again light and includes the weekly MBA mortgage applications survey, the monthly budget statement, and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 7.0 (The Ukraine situation remains a significant geopolitical risk in 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 $1,355.75 versus the P.M. fixing of $1,346.25.

Technically, April gold futures prices are in a 2.5-month-old uptrend on the daily bar chart and have just hit a six-month high. The gold bulls have the near-term technical advantage and gained more upside momentum Wednesday. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,400.00. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,326.60. First resistance is seen at the overnight high of $1,364.10 and then at $1,370.00. First support is seen at $1,355.00 and then at $1,350.00.  

May silver futures bears have the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.00. First resistance is seen at the overnight high of $21.21 and then at $21.50. Next support is seen at the overnight low of $20.82 and then at this week’s low of $20.61.

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