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(Kitco News) - Comex gold and silver futures prices ended higher Tuesday as bargain hunters stepped in to buy the weaker prices seen earlier in the trading session. August gold closed at a new record high close. The U.S. dollar index extended its early losses as the day progressed, which also added to investor demand for the safe-haven precious metals. August gold last traded up $5.30 at $1,617.50 an ounce. Spot gold last traded up $2.70 an ounce at $1,618.00. December Comex silver last traded up $0.459 at $40.845 an ounce.

Gold and silver futures were under mild profit-taking pressure in the early going, but traders and investors viewed the weakness as only temporary and "bought the dip."

The market place is now focusing on other matters besides the U.S. debt-ceiling debacle in the U.S. Congress. Most traders and investors correctly reckon a debt-limit-hike agreement will be reached before the U.S. government defaults on its payments.

The U.S. dollar index traded solidly lower Tuesday and hit a fresh 2.5-month low. The dollar index bears have solid downside technical momentum and possess the overall technical advantage. The very weak technical posture of the dollar index is an underlying bullish factor for gold and silver, as was in evidence Tuesday.

Crude oil prices traded firmer Tuesday and are still hovering just below $100.00 a barrel. Crude oil bulls still have some upside momentum and have the overall technical advantage. If crude oil continues to rally and pushes above major psychological resistance at $100.00 a barrel that would also be a bullish factor for the precious metals.

The London P.M. gold fixing was $1,612.75 versus the previous P.M. fixing of $1,613.50.

Technically, August gold futures prices closed nearer the session high and set a fresh all-time record high close Tuesday. Gold bulls have the strong overall near-term technical advantage. Prices are in a six-month-old uptrend on the daily bar chart and in a 10-year-old uptrend on the monthly chart. Bulls' next near-term upside technical objective is to produce a close above solid resistance at $1,650.00. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,581.10. First resistance is seen at the record high of $1,624.30 and then at $1,630.00. First support is seen at Tuesday's low of $1,607.80 and then at this week's low of $1,603.80. Wyckoff's Market Rating: 8.5.

December silver futures prices closed near the session high and closed at a fresh 11-week high close Tuesday. The silver bulls have the solid overall technical advantage. Bulls' next upside price objective is producing a close above solid technical resistance at $42.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week's low of $38.26. First resistance is seen at this week's high of $41.10 and then at $41.50. Next support is seen at $40.50 and then at this week's low of $39.91. Wyckoff's Market Rating: 7.0.

December N.Y. copper closed up 735 points 450.00 cents Tuesday. Prices closed near the session high and closed at a fresh 3.5-month high close. The key "outside markets" were bullish for copper Tuesday, as the U.S. dollar index was sharply lower while crude oil prices were higher. The copper bulls have the solid overall near-term technical advantage and gained fresh upside momentum today. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week's high of 451.20 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at last week's low of 438.75 cents. First resistance is seen at 451.20 cents and then at 452.50 cents. First support is seen at 447.50 cents and then at 445.00 cents. Wyckoff's Market Rating: 7.0.

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

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