Comex gold futures closed near unchanged levels in a calmer trading session Wednesday, as the market was in a consolidation mode following sharp losses on Tuesday that did produce fresh near-term technical damage. Gold futures prices did poke to another fresh three-month low in early trading Wednesday. December gold closed up $0.80 an ounce at $1,162.40. Spot gold was last quoted up $2.20 at $1,164.25.

Some bargain-hunting physical buying and some bottom-fishing by speculative futures traders did put a floor under the gold market Wednesday, as the bulls were able to fend off any follow-through selling pressure from Tuesday's solid price declines.

Investor demand for gold has cooled recently. Traders are now seeking out other investment assets, as evidenced by rallies in U.S. and European stock markets recently. Gold had seen strong safe-haven buying interest in the second quarter of the year, due partly to the European Union's debt crisis prompting traders to sell European currencies and buy gold. However, the Euro currency's recent strength has thwarted those trading strategies. Reports said holdings in SPDR Gold Shares dropped 1.22 metric tons this week, to the lowest level sine early June.

None of the key "outside markets"--crude oil, the U.S. dollar index and U.S. stock indexes--provided the gold market with a strong trading direction Wednesday, as those markets did not post strong price moves.

The London P.M. fixing was $1,157.00 compared to the previous P.M. fixing of $1,168.00.

Technically, December gold futures have seen serious near-term technical damage inflicted this week. Prices are in a six-week-old downtrend on the daily bar chart. However, there has been no significant longer-term technical damage seen on the weekly or monthly charts for gold futures. Bears' next near-term downside price objective is closing prices below solid technical support at $1,150.00. Bulls' next near-term upside technical objective is to produce a close above solid chart resistance at $1,200.00. First resistance for December Comex gold is seen at Wednesday's high of $1,168.80 and then at $1,172.00. Support is seen at Wednesday's low of $1,159.30 and then at $1,155.00. Wyckoff's Market Rating: 4.5.

December silver futures closed down 18.8 cents at $17.494 an ounce Wednesday. Prices closed nearer the session low and did hit a fresh seven-week low. Bulls have faded and the bears now have the slight near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at the June low of $17.335. Bulls' next upside price objective is closing prices above solid technical resistance at last week's high of  $18.335 an ounce. First resistance is seen at Wednesday's high of $17.775 and then at $18.00. Next support is seen at Wednesday's low of $17.40 and then at $17.335. Wyckoff's Market Rating: 4.5.

December N.Y. copper closed up 395 points at 326.65 cents Wednesday. Prices closed nearer the session high and hit a fresh 11-week high. Copper bulls have the overall near-term technical advantage and gained some fresh upside technical momentum today. Prices are in a seven-week-old uptrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at 314.00 cents. Bulls' next upside objective is pushing and closing prices above solid technical resistance at 340.00 cents. First resistance is seen at Wednesday's high of 328.50 cents and then at 330.00 cents. First support is seen at 325.00 cents and then at 322.50 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

Editor’s Note: Meet the Kitco News Team at the upcoming Kitco Metals eConference September 12-13, 2010. A not-to-be missed event featuring Ron Paul, Marc Faber and other industry heavyweights. The eConference is free with Pre- Registration www.kitcoeconf.com.

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