Gold prices are trading near steady in the early going Wednesday but did hit a nearly four-month low overnight. The bears are still on the prowl in gold and silver. The technical postures for both markets have turned more bearish this week. Risk appetite in the world market place is also on the upswing early this week, and that’s another negative for safe-haven gold. June Comex gold was last up $0.70 at $1,265.90 an ounce. Spot gold was last quoted up $2.10 at $1,266.00. July Comex silver last traded up $0.008 at $19.075 an ounce.

A feature in the market place this week has been the better risk appetite among world traders and investors. Major world stock markets have rallied recently, with many stock indexes at record or multi-year highs. The Russia-Ukraine crisis has not escalated recently and the rest of the world geopolitical front is presently quieter. Also, there is a quietly growing thought among many market participants that the U.S. and world economies may not be growing as fast as many had expected just a few months ago. That notion calls into question the Federal Reserve’s recent tapering program that is gradually winding down the quantitative easing of U.S. monetary policy. The above notion is an underlying bullish element for the stock markets.

European stock markets were stable overnight following their recent winning streak. Focus in Europe is turning to next week’s monthly monetary policy meeting of the European Central Bank. It’s widely believed the ECB will announce further monetary policy stimulus measures at that meeting. Recent weak European Union economic data and fears of deflation setting in for the EU are solid reasons for the ECB to make a move next week. Tepid investor demand for a German bond auction Wednesday is further evidence of the European markets being subdued ahead of next week’s ECB meeting.

China finance officials on Wednesday urged local governments to speed up their infrastructure spending, in an effort to prod China’s general economy. The annual GDP for China is around 7%. That’s about double the growth rate of other major world economies at present, but is below the annual growth rate in China of the past few years.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine crisis has not escalated and the rest of the world is quieter regarding geopolitics.)

(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 $1,265.25 versus the previous P.M. fixing of $1,275.50.

Technically, June gold futures bears have the near-term technical advantage. A six-week-old downtrend line is now in place on the daily bar chart, after Tuesday’s bearish downside “breakout” from a congestion area on the daily chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at $1,270.00 and then at $1,275.00. First support is seen at the overnight low of $1,267.10 and then at $1,260.00.  

July silver futures bears have the overall near-term technical advantage and have gained fresh downside momentum this week. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $20.005 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $18.685. First resistance is seen at the $19.25 and then at Tuesday’s high of $19.50. Next support is seen at $19.00 and then at $18.95.

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