Comex gold futures prices are trading steady to firmer in quieter early dealings Friday. The weaker U.S. dollar is supporting the precious metals, but traders were eagerly awaiting the monthly U.S. employment report. Gold market watchers are also taking note of provocative remarks on the Euro currency made by former Federal Reserve Chairman Alan Greenspan Friday morning. February Comex gold last traded up $0.50 at $1,389.80 an ounce. Spot gold last traded up $4.40 at $1,389.75.

The U.S. dollar index is under more modest profit-taking selling pressure Friday morning, after hitting a 2.5-month high Tuesday. The greenback could get a boost from Friday morning's U.S. jobs report. The employment report is expected to show a strengthening U.S. jobs sector. The key non-farm payrolls figure is expected to have risen by 144,000 in November.

This week's rally in the U.S. stock market has injected more investor risk appetite into the market place, which has taken away some of the safe-haven buying interest in the precious metals.

Sovereign debt problems in the European Union remain on the front burner for investors and traders. That situation has been bullish for the gold market for most of 2010, and those problems are not likely to go away any time soon. In an interesting and compelling interview with former Federal Reserve Chairman Alan Greenspan on CNBC Friday morning, he was asked about the sustainability of the Euro currency amid the recent sovereign debt turmoil. Greenspan replied that he knew the grand experiment of a common currency "was over" when the EU's two strongest countries, France and Germany, could not comply with their own debt ratio agreements that were established with the formation of the Euro currency. Greenspan also said the "culture clash" between the European countries is too great to have a lasting single currency. Greenspan is very likely correct in his assumptions, and if he is correct, the Euro currency has seen its best days and could now see an extended period of decline until its demise. Such a scenario would be longer-term gold market bullish as investors would look to buy gold with their weakening Euros.

Other U.S. economic data due for release Friday includes manufacturers shipments, inventories and orders, and the ISM non-manufacturing report.

The London A.M. gold fixing was $1,391.75 versus the previous P.M. fixing of $1,389.00.

Technically, gold futures bulls still have the solid overall near-term technical advantage. Bulls' next near-term upside technical objective for February Comex gold is to produce a close above psychological resistance at $1,400.00. That key price level is within striking distance. Bears' next near-term downside price objective is closing prices below solid technical support at $1,352.00. First resistance is seen at $1,400.00 and then at $1,410.00. Support is seen at the overnights low of $1,385.30 and then at $1,375.00. Today's near-term Fibonacci support/resistance level: $1,390.00.

March silver futures last traded up 13.3 cents at $28.705 an ounce. The weaker U.S. dollar is supporting silver Friday. Silver bulls have the solid overall near-term technical advantage at present. Prices are in a 3.5-month-old uptrend on the daily bar chart. The next downside near-term price objective for the bears is closing prices below solid technical support at $27.00. Bulls' next upside price objective is producing a close above solid technical resistance at the November high of $29.405 an ounce. First resistance is seen at this week's high of $29.08 and then at $29.40. Next support is seen at the overnight low of $28.595 and then at $28.33. Today's near-term Fibonacci support/resistance level: $27.76.

By Jim Wyckoff of Kitco News; jwyckoff@kitco.com

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