Comex gold futures prices are trading weaker early Friday, as some mild profit-taking pressure is being observed amid a bit more investor risk appetite that has surfaced late this week. December gold last traded down $5.00 an ounce at $1,246.00. Spot gold was last quoted up $1.60 at $1,246.00.

News overnight that Bangladesh has purchased 10 tons of gold from the International Monetary Fund did provide some support to the spot gold market. The sale was for $403 million, reports said.

Good demand for physical gold on price dips continues to limit the downside in gold.

The U.S. dollar index is trading weaker Friday morning, as trading has been choppy and sideways recently. U.S. stock indexes are firmer and are showing surprising resilience so far in September, while at the same time the U.S. Treasury markets are fading this week. Both markets are suggesting a slight uptick in investor risk appetite. Gold is viewed as a safe-haven investment asset, and the better risk appetite is bearish for the precious yellow metal.

If recent history holds true, any significant price dip in the gold market will become a bargain-hunting buying opportunity for traders and investors.

There are no major U.S. economic reports due out Friday. Over the weekend, China is expected to release some key economic data, including inflation data, which will be closely scrutinized by traders on Monday morning.

The London A.M. gold fixing was $1,248.75 versus the previous London P.M. fixing of $1,255.00.

Technically, Comex gold bulls still have the overall near-term and longer-term technical advantage. However, the bulls do not want to see a near-term bearish weekly low close on Friday, which is poised to occur if prices remain lower on the day. December gold prices are still in a six-week-old uptrend on the daily bar chart. At present, there are still no early technical clues to suggest a market top is close at hand.

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 the contract and all-time record high of $1,270.60. The bears' next near-term downside price objective is producing a close in December gold futures below solid chart support at last week's low of $1,233.50.

For December gold, shorter-term technical resistance is located at the overnight high of $1,251.80 and then at Thursday's high of $1,260.50. Buy stops likely reside just above those levels. Sell stops likely reside just below chart support at this week's low of $1,243.50 and then at $1,239.20. Today's key near-term Fibonacci pivot level for December gold: $1,244.00.

Comex silver futures are slightly lower Friday morning on some more mild profit-taking pressure from recent gains. December silver last traded down 2.0 cents at $19.835 an ounce. The silver bulls still have the solid overall near-term technical advantage. Silver will continue to generally follow the lead of the gold market.

The next near-term upside price objective for the silver market bulls is to produce a close above solid technical resistance at $21.00 an ounce in December Comex futures. The next downside price objective for the silver bears is to push and close December silver prices below solid technical support at $19.00

December silver finds shorter-term technical resistance at $20.00 and then at Thursday's high of $20.095. Buy stops likely reside just above those levels. Shorter-term technical support for December silver is located at this week's low of $19.68 and then at $19.50. Sell stops are likely placed just below those levels. Today's key Fibonacci pivot level for December silver futures is located at $19.61.

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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