Comex gold futures are trading near unchanged price levels Monday morning in quieter activity, as the market consolidates and awaits fresh fundamental inputs to drive prices. December gold last traded down $0.50 an ounce at $1,228.30. Spot gold was last quoted down $1.70 at $1,227.00.

The U.S. dollar index is trading slightly lower Monday, which is mildly bullish for gold. Firmer crude oil futures prices are also friendly for the yellow metal. However, U.S. stock indexes are firmer and U.S. Treasuries are weaker, which does suggest investor risk appetite has up-ticked slightly to start the new trading week. That's a negative for the gold market.

This week is the start of the festival season in India, and gold is a favorite gift given during the festival. That should keep physical demand for gold at a higher level in the near term.

U.S. economic data due out Monday includes the Chicago Federal Reserve national activity index. The U.S. economic report schedule picks up steam as the week progresses, with several key reports issued, including existing home sales on Tuesday, durable goods orders on Wednesday, weekly jobless claims on Thursday and the GDP report on Friday.

The London A.M. gold fix was $1,227.00 versus the previous P.M. fixing of $1,223.50.

Technically, the gold market bulls still have the near-term technical advantage. Prices are in a solid four-week-old uptrend on the daily bar chart. The longer-term charts also still fully favor the gold market bulls, as they, too, show longer-term price uptrends in place.

The next near-term upside price objective for the gold market bulls is to push and close December futures prices above solid chart resistance at $1,250.00. The bears' next near-term downside price objective is producing a close in December gold futures below solid chart support at $1,200.00.

For December gold, shorter-term technical resistance is located at the overnight high of $1,234.00 and then at last week's high of $1,239.50. Buy stops likely reside just above those levels. Sell stops likely reside just below chart support at Friday's low of $1,223.60 and then at last week's low of $1,218.90. Today's key near-term Fibonacci pivot level for December gold: $1,228.00.

Comex silver futures are weaker Monday morning. December silver last traded down 3.6 cents at $18.005 an ounce. The silver bears have gained some fresh downside near-term technical momentum after producing a bearish weekly low close last Friday.

The next near-term upside price objective for the silver market bulls is to push and close December Comex futures prices above solid chart resistance at the August high of $18.75 an ounce. The next downside price objective for the silver bears is to push and close December silver prices below solid technical support at the August low of $17.855.

December silver finds shorter-term technical resistance at Monday's high of $18.13 and then at $18.25. Buy stops likely reside just above those levels. Shorter-term technical support for December silver is located at the August low of $17.855 and then at $17.75. Sell stops are likely placed just below those levels. Today's key Fibonacci pivot level for December silver futures is located at $17.91.

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.

****

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.