(Kitco News) – Comex December gold futures prices are trading modestly lower early Tuesday, as the bearish forces of a stronger U.S. dollar index and solidly lower crude oil prices are presently trumping safe-haven investor demand due to weaker world stock markets. December gold last traded down $11.00 an ounce at $1,646.60 an ounce. Spot gold last traded up $30.80 an ounce at $1,656.25. December Comex silver last traded down $0.45 at $30.345 an ounce.
U.S., European and Asian stock markets were under pressure again Tuesday, due to the European Union sovereign debt crisis and the growing reality of a credit default by Greece. This situation has taken a turn for the worse as Greece will apparently not meet its deficit targets this year. This has prompted more scrambling by EU and IMF officials, including rescheduling of meetings that are raising investor anxiety even more. On Monday the gold market benefited from the aforementioned situation, but on Tuesday gold traders are focusing a bit more on the stronger dollar and weaker crude oil prices. Still, the EU debt crisis bolsters notions gold continues to be a “world currency” for many investors worldwide.
The U.S. dollar index is trading higher Tuesday morning and hit another fresh 7.5-month high overnight. The dollar index bulls have the solid overall near-term technical advantage, which has been a major underlying bearish factor for the precious metals recently.
Crude oil futures prices are trading lower Tuesday and hit a fresh 16-month low overnight. Crude oil bulls are gaining more downside technical momentum. If crude oil continues to trend lower that would be a bearish clue for most commodity markets, including gold and silver.
Traders and investors will closely monitor U.S. Federal Reserve Chairman Ben Bernanke’s speech on the economy before the Joint Economic Committee at 10:00 a.m. EDT Tuesday.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs chain store sales index, the weekly Johnson Redbook retail report, and manufacturer’s shipments and orders.
The London A.M. gold fixing was $1,672.00 versus the previous P.M. fixing of $1,655.50.
Technically, December gold futures prices have rebounded well up from the September spike low of $1,535.00. However, prices are still in a four-week-old downtrend on the daily bar chart. Price action in gold this week will be extra important as the bulls and bears struggle for near-term technical control of the market. Bulls’ next upside technical objective is to produce a close above solid technical resistance at $1,705.40. Bears’ next near-term downside price objective is closing prices below strong technical support at the September low of $1,535.00. First resistance is seen at the overnight high of $1,681.50 and then at $1,705.40. First support is seen at the overnight low of $1,641.00 and then at Monday’s low of $1,620.00.
December silver futures prices have also rebounded well off the spike low of $26.15, scored in late September. Silver bulls have some heavy lifting to do in the near term to suggest an uptrend can be re-established. Prices are presently in a six-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is producing a close above strong technical resistance at last week’s high of $33.585 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $26.15. First resistance is seen at $31.00 and then at the overnight high of $31.355. Next support is seen at $30.00 and then at $29.50.
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