(Kitco News) - Gold prices are higher in early U.S. trading Thursday, on safe-haven buying interest, short covering and perceived bargain hunting. Geopolitics is back on the front burner of the market place as a three-day U.S. holiday weekend approaches. December Comex gold was last up $11.00 at $1,294.40 an ounce. Spot gold was last quoted up $10.90 at $1,294.00. December Comex silver last traded up $0.32 at $19.795 an ounce.
It’s a “risk-off” day in the market place Thursday following reports the Ukrainian president said the Russian military has invaded his country and is occupying eastern Ukraine towns and villages. There is reportedly ongoing fighting between the Russian and Ukraine armies. A Russian official denied that Russian troops are in eastern Ukraine.
Gold, U.S. Treasuries and the U.S. dollar index are all supported on safe-haven demand amid this news. Meantime, world stock markets are seeing selling pressure from the keener risk aversion in the market place Thursday.
It had been a subdued trading week, on this unofficial last week of summer, heading into the three-day U.S. Labor Day holiday weekend. Now, with geopolitical tensions rising, the three-day weekend and all that could happen in world hotspots during that time, many traders and investors will take action the next two trading sessions to reduce their risk exposure in the market place.
There is also important U.S. economic data due for release Thursday, including the weekly jobless claims report, the second-quarter gross domestic product report, pending home sales, and the Kansas City Fed manufacturing survey.
Wyckoff’s Daily Risk Rating: 7.5 (The market place is now focused on the tensions between Russia and Ukraine, heading into a long U.S. holiday weekend.)
(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 $1,288.00 versus the previous P.M. fixing of $1,282.75.
Technically, gold bears still have the slight overall near-term technical advantage as a seven-week-old downtrend is still in place on the daily bar 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 the August low of $1,273.40. First resistance is seen at the overnight high of $1,296.40 and then at $1,300.00. First support is seen at the overnight low of $1,283.00 and then at $1,273.40.
December silver futures bears still have the near-term technical advantage. However, a seven-week-old downtrend on the daily bar chart has been negated with Thursday’s solid gains. 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 the August low of $19.355. First resistance is seen at the overnight high of $19.95 and then at $20.00. Next support is seen at $19.65 and then at the overnight low of $19.47.
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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
