Gold prices are moderately lower in early U.S. trading Thursday. The bearish technical posture of gold combined with no significant, fresh bullish fundamental news is allowing the sellers to have their way so far Thursday. June gold was last down $7.10 at $1,283.70 an ounce. Spot gold was last quoted down $7.10 at $1,283.40. May Comex silver last traded up $0.22 at $19.83 an ounce.

The European Central Bank held its monthly monetary policy meeting Thursday. The ECB made no major policy changes, which was the outcome expected by most. The upcoming press conference from ECB president Mario Draghi could give guidance on what the ECB will do in the coming weeks. The European Union’s producer price index dropped 0.2% in February and was down 1.7% year-on-year, it was reported Wednesday. The year-on-year decline was the largest since late 2009 and is yet another element adding to the deflation concerns in the EU. The PPI report puts more pressure on the ECB to ease its monetary policy in order to jumpstart economic growth in the EU. Draghi is likely to address this week’s EU PPI number at his press conference.

The Markit data firm reported Thursday the EU’s composite purchasing managers index fell to 53.1 in March from 53.3 in February. A reading above 50.0 suggests expansion. However, the survey said businesses reduced their prices for the 24th month in a row.

In other overnight news the Chinese government announced a $24 billion stimulus plan in the form of railway improvements. Also, the HSBC China purchasing managers’ index rose to 51.9 in March from 51.0 in February. Asian equity markets were supported on the China stimulus and PMI news.

Arguably the most important economic data point of the week and of the month is Friday’s March U.S. employment report from the Labor Department. The key non-farm payrolls number is expected to be up 200,000. Trading in many markets could be constrained ahead of that report.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, the international trade report, the global services PMI, and the U.S. services PMI.

Wyckoff’s Daily Risk Rating: 5.0 (The geopolitical front is quiet at present, from a market place perspective.)

(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 $1,287.25 versus the P.M. fixing of $1,292.00.

Technically, June Comex gold bears have the overall near-term technical advantage. Prices are in a steep three-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below technical support at $1,250.00. First resistance is seen at the overnight high of $1,294.20 and then at $1,300.00. First support is seen at this week’s low of $1,277.40 and then at $1,270.00.  

May silver futures bears have the firm near-term technical advantage. A five-week-old downtrend is in place on the daily bar chart. 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 $20.00 and then at this week’s high of $20.145. Next support is seen at Wednesday’s low of $19.73 and then at last week’s low of $19.575.

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