(Kitco News) - Comex gold and silver futures prices ended the U.S. day session modestly lower Monday in two-sided trading. A tentative agreement reached Sunday regarding the extending the U.S. debt limit and reducing the federal deficit initially boosted investor risk appetite Monday morning, which pressured gold. However, prices then rallied on some weak U.S. economic data, only to fall back late in the session as the key "outside markets"--the U.S. dollar index and crude oil--were bearish. December gold last traded down $7.00 at $1,624.20 an ounce. Spot gold last traded down $5.40 an ounce at $1,621.25. December Comex silver last traded down $0.706 at $39.425 an ounce.

Gold was pressured early on by the U.S. debt agreement, but then rallied to its daily high when a surprisingly weak U.S. ISM manufacturing report came out at its lowest reading in two years. That once again put the focus back on a sluggish U.S. economy and sparked some fresh safe-haven buying interest and bargain hunting in the precious metals.

The tentative deal between the U.S. House and Senate still has to be voted upon by both, but it appears the major hurdles were cleared during the weekend. While most traders and investors believed a debt-limit-hike agreement would eventually be reached before the U.S. government defaulted on its payments, the market place late last week did become extra anxious. Most felt a deal needed to be reached among U.S. lawmakers by Monday, or the markets would become very stressed. Of course, the market place always has to have some worry in the front burner. Now, there is the worry that ratings agencies will downgrade the U.S. credit rating anyway.

Importantly, the likely bigger debt issue lies with the European Union. The EU debt crisis is likely to continue to support investor demand for gold for months to come. In fact, it would not be surprising if the EU debt crisis moves back to the front burner in the coming days, once the U.S. debt problems get pushed down the road by Congress. Indeed, the EU did crisis did start to creep back into the business news chatter Monday afternoon.

The U.S. dollar index traded higher Monday, which did limit the upside in the precious metals Monday. The dollar index bears have the overall near-term technical advantage. However, it's near present price levels in the dollar index that historical lows have been put in place.

Crude oil prices traded solidly lower Monday morning and reversed early gains, which also limited the upside in gold and silver. Crude will continue to be a major "outside market" force for the precious metals.

The London P.M. gold fixing was $1,623.00 versus the previous P.M. fixing of $1,628.50.

Technically, December gold futures prices closed near mid-range Monday. Gold bulls still have the solid 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 $1,583.60. First resistance is seen at $1,630.00 and then at Friday's record high of $1,637.50. First support is seen at Monday's low of $1,608.20 and then at last week's low of $1,605.00. Wyckoff's Market Rating: 8.0.

December silver futures prices closed nearer the session low Monday and saw more profit-taking pressure. The key "outside markets" were bearish for gold silver, as the U.S. dollar index was higher and the crude oil prices were lower. Bulls are beginning to fade a bit and need to show fresh power soon. The silver bulls still have the overall technical advantage. Bulls' next upside price objective is producing a close above solid technical resistance at last week's high of $41.47 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $38.26. First resistance is seen at $40.00 and then at $40.41. Next support is seen at Monday's low of $39.08 and then at $38.92. Wyckoff's Market Rating: 6.0.

December N.Y. copper closed down 765 points 442.40 cents Monday. Prices closed nearer the session low after hitting a fresh nearly four-month high early on. Prices Monday scored a big and bearish "outside day" down on the daily bar chart. The key "outside markets" were bearish for copper today, as the U.S. dollar index was higher and the crude oil prices were lower. The copper bulls still have the overall near-term technical advantage but did fade today. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at today's high of 455.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 438.75 cents. First resistance is seen at 445.00 cents and then at 446.65 cents. First support is seen at 440.00 cents and then at 438.75 cents. Wyckoff's Market Rating: 7.0.

Follow me on Twitter! If you want daily, or nightly, up-to-the-second market analysis on gold and silver price action, then follow me on Twitter. It's free, too. My account is @jimwyckoff .

By Jim Wyckoff contributing to Kitco News; jwyckoff@kitco.com

<<Back to more Kitco exclusive news

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