Gold prices are modestly higher in early U.S. trading Thursday, boosted on some short covering and by a slumping U.S. dollar index. June gold was last up $3.50 at $1,292.50 an ounce. Spot gold was last quoted up $1.90 at $1,292.25. July Comex silver last traded down $0.017 at $19.325 an ounce.

The U.S. dollar index this week hit a multi-month low as the greenback continues in a near-term price downtrend on the daily chart. The dollar bears are in firm technical control, which is a bullish underlying factor for most of the raw commodities, including precious metals.

The major market place event for Thursday is the European Central Bank monthly monetary policy meeting. There was no change in ECB monetary policy announced at this meeting, as expected. However, there is growing pressure on the ECB to implement further monetary policy stimulus measures, amid worries about price deflation in the European Union. The Euro currency is at a multi-week high against the U.S. dollar, and the strength of the common currency is also a concern to many European officials and another reason to EU interest rates. ECB President Mario Draghi’s press conference following the ECB meeting will be closely watched for clues on future ECB monetary policy moves.

Fed Chair Janet Yellen speaks to the U.S. Congress again today, this time to a Senate committee. The take away from Wednesday’s Yellen comments was that the U.S. economy is on the upswing, but don’t look for U.S. interest rates to rise any time soon due to a still-struggling housing sector.

The Russia-Ukraine tensions have not gone away, even though other market place matters have garnered the headlines this week. Traders and investors were somewhat assuaged Wednesday when reports said Russian President Vladimir Putin made comments that were deemed conciliatory. Gold and U.S. Treasuries have seen some safe-haven buying in recent weeks, amid the heightened Russia-Ukraine conflict. This matter is not going away soon and will likely see an escalation in tensions. This remains a bullish underlying factor for the gold market.

U.S. economic data due for release Thursday includes the weekly jobless claims report and ICSC chain store sales trends.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are elevated.)

(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 $1,291.25 versus the previous P.M. fixing of $1,296.00.

Technically, June gold futures bears still have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,315.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,268.40. First resistance is seen at the overnight high of $1,295.50 and then at $1,300.00. First support is seen at this week’s low of $1,286.60 and then at $1,280.00.  

July silver futures bears have the solid overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $18.685. First resistance is seen at the overnight high of $19.39 and then at $19.50. Next support is seen at the overnight low of $19.205 and then at $19.00.

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