Comex gold futures prices closed firmer and poked to another fresh six-week high Tuesday in quieter trading. The market continues to see some fresh speculative buying interest amid a weakening U.S. dollar index and building technical momentum this week. December gold last traded up $1.30 an ounce at $1,227.50. Spot gold was last quoted up $0.10 at $1,226.00.

Recent weak economic data coming out of the U.S., China and Japan--the three largest economies in the world--have prompted a decrease in investor risk appetite, which has created more safe-haven buying interest in gold recently. The European Union also has its own sovereign debt problems, which have temporarily been pushed to the back burner, but which could come to a boil at any time. That's also an underlying positive fundamental for gold. However, the higher U.S. stock indexes on Tuesday and some better U.S. economic data released did work to limit the upside gains in the gold market.

A weaker U.S. dollar index again Tuesday also provided a lift to the gold market. This week will be an extra important trading week in the currency markets. If the U.S. dollar index this week shows more downside price action and closes on Friday at or near the weekly low, then it's likely the downtrend in the dollar index will resume, and that last week's price strength was just a decent upside correction in the overall downtrend. A resumption of the downtrend in the U.S. dollar index would be significantly bullish for the gold market.

The London P.M. fixing was $1,226.00 compared to the previous P.M. fixing of $1,223.50.

Technically, December gold futures prices closed near mid-range. Bulls have gained upside near-term technical momentum recently. Gold prices are in a three-week-old uptrend on the daily bar chart. Bulls' next near-term upside technical objective is to produce a close above solid chart resistance at $1,250.00. Bears' next near-term downside price objective is closing prices below solid technical support at $1,200.00. First resistance is seen at Tuesday's high of $1,231.10 and then at $1,240.00. Support is seen at Tuesday's low of $1,224.30 and then at this week's low of $1,216.20. Wyckoff's Market Rating: 7.0.

December silver futures last traded up 14.2 cents at $18.625 an ounce Tuesday. Prices closed nearer the session high and hit a fresh two-week high. A weaker U.S. dollar boosted the silver market bulls again Tuesday. Silver bulls have the near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at last week's low of $17.855. Bulls' next upside price objective is closing prices above solid technical resistance at $19.00 an ounce. First resistance is seen at Tuesday's high of $18.675 and then at the August high of $18.75. Next support is seen at Tuesday's low of $18.43 and then at $18.25. Wyckoff's Market Rating: 6.5.

December N.Y. copper last traded up 635 points at 336.40 cents Tuesday. Prices closed near the session high and saw more short covering and fresh speculative buying interest. A weaker U.S. dollar index also supported buying interest in the copper market again Tuesday. Copper bulls have the overall near-term technical advantage. Prices are in a nine-week-old uptrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at 320.00 cents. Bulls' next upside objective is pushing and closing prices above solid technical resistance at the August high of 343.05 cents. First resistance is seen at Tuesday's high of 337.10 cents and then at 340.00 cents. First support is seen at 335.00 cents and then at 332.50 cents. Wyckoff's Market Rating: 6.5.

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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