(Kitco News) -
Comex December gold futures prices are trading modestly higher in
early U.S. trading Monday. Safe-haven buying interest is featured
to start the new trading week, amid the ongoing and festering
European Union debt crisis. This week is starting out as a "risk
off" trader and investor mentality in the world market place, as
evidenced by weaker world stock markets. That's bullish for the
safe-haven gold market. December gold last traded up $2.70 an
ounce at $1,817.40 an ounce. Spot gold last traded up $3.10 an
ounce at $1,816.00. December Comex silver last traded down $0.301
at $40.53 an ounce.
The European Union sovereign debt situation remains in the
financial news headlines Monday. The weekend found no major
agreements among EU and Greece officials, and there is now
concern that Greece could default on a debt payment this week.
Meantime, EU officials doling out the money to Greece are trying
to hold Greece's feet closer to the fire, regarding commitments
to austerity measures. This situation is messy and many believe
it cannot be resolved without Greece being kicked out of the
European monetary union. The EU debt situation remains a bullish
underlying factor for gold, even though it's likely that the
present bad situation regarding EU debt has likely been mostly
factored into market prices.
The U.S. dollar index is trading higher Monday. The greenback
is seeing buying support coming from the weakening Euro currency
amid the EU debt crisis. The greenback bulls have the near-term
technical advantage. The recently improved technical posture of
the U.S. dollar index has been an underlying bearish factor for
the precious metals. However, the inverse trading relationship
between gold and the U.S. dollar index has become less pronounced
that it had been in recent months. Recent months have seen gold
and the dollar index trade in tandem on the upside when investor
anxiety is at higher levels.
Crude oil futures prices are trading weaker early Monday, and
that is somewhat limiting the upside in gold and more so in
silver. Crude oil bulls still have a bit of upside momentum.
Crude oil will remain an important "outside market" that will
influence the precious metals markets.
U.S. economic data due for release Monday is light and
includes the NAHB housing market index.
The London A.M. gold fixing was $1,817.00 versus the previous
P.M. fixing of $1,794.00.
Technically, December gold futures have seen no serious chart
damage inflicted with recent losses. At present, the gold market
bulls still have the overall technical advantage. Longer-term and
shorter-term price trends remain up on the charts. Bulls' next
upside technical objective is to produce a close above solid
technical resistance at last week's high of $1,865.20. Bears'
next near-term downside price objective is closing prices below
solid technical support at last week's low of $1,765.40. First
resistance is seen at the overnight high of $1,832.90 and then at
1,850.00. First support is seen at $1,810.00 and then at
December silver futures bulls still have the overall near-term
technical advantage, but have faded recently. Bulls' next upside
price objective is producing a close above strong technical
resistance at last week's high of $41.60 an ounce. The next
downside price breakout objective for the bears is closing prices
below solid technical support at last week's low of $39.40. First
resistance is seen at $40.50 and then at the overnight high of
$40.90. Next support is seen at the overnight low of $40.20 and
then at $40.00.
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By Jim Wyckoff contributing to Kitco News;