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(Kitco News) - Comex February gold futures prices are trading higher Monday morning and have hit a fresh six-week high of $1.677.90 amid a “risk on” trading day in the market place. Stock and most commodity markets are trading higher on some improving investor attitudes that the European Union debt crisis has stabilized. February gold last traded up $11.60 at $1,675.60 an ounce. Spot gold was last quoted up $8.50 an ounce at $1,676.00.  March Comex silver last traded up $0.87 at $32.545 an ounce.

Fresh developments coming out of the European Union debt crisis early this week include good demand for a German debt auction and a meeting Monday of EU officials on the crisis. There is also some better optimism regarding Greek officials and their private sector discussing their debt restructuring. This has boosted the Euro currency recently, and that has been a bullish factor for gold. At present it appears the general market place thinks the worst is behind regarding the EU crisis. Still, that notion could change quickly. 

The U.S. dollar index is lower Monday morning as the greenback bulls are fading as the Euro currency rallies on the EU optimism. Crude oil prices are trading higher as prices hover near $100.00 a barrel. These two key “outside markets” are in bullish postures for the precious metals markets Monday.

The London A.M. gold fixing was $1,675.00 versus the previous London P.M. fixing of $1,653.00.

There is no major U.S. economic data due for release Monday. Traders are awaiting this week’s meeting of the Federal Reserve’s FOMC.

Technically, February Comex gold futures prices are in a four-week-old uptrend on the daily bar chart.  Bulls have upside near-term technical momentum on their side. Bulls' next upside technical breakout objective is to push prices above psychological resistance at $1,700.00. Bears' next near-term downside price objective is closing prices below solid technical  support at the last “reaction low” on the daily chart, at $1,625.70. First resistance is seen at the overnight high of $1,677.90 and then at $1,685.00. First support is seen at the overnight low of $1,663.00 and then at $1,650.00.

March Comex silver futures prices hit a fresh six-week high overnight and are also in a four-week-old uptrend on the daily bar chart. Bulls have some upside near-term technical momentum. Their next upside price breakout objective is closing prices above solid technical resistance at the December high of $33.74 an ounce. The next downside price breakout objective for the bears is closing prices below psychological support at $30.00. First resistance is seen at the overnight high of $32.775 and then at $33.00. Next support is seen at $32.00 and then at the overnight low of $31.79.

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By Jim Wyckoff contributing to Kitco News; jim@jimwyckoff.com

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