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(Kitco News) - Comex gold futures prices ended the U.S. day session in very strong fashion and hit another all-time record high of $1,722.40, basis December futures, as of this writing. The precious yellow metal saw strong safe-haven investment demand after the U.S. got a credit downgrade late Friday and as the European Union attempts to contain its own escalating debt crisis. December gold last traded up $68.60 at $1,720.40 an ounce. Spot gold last traded up $54.80 an ounce at $1,718.50. December Comex silver last traded up $1.264 at $39.505 an ounce.

The late-Friday Standard & Poors downgrade of the U.S. debt rating was not a real big surprise to most market watchers, but the market place did see a strong reaction to the news. Ironically, the U.S. dollar index traded slightly higher and U.S. Treasuries prices soared on the news. That's a clue that there are many who still feel the U.S. is still the best bet during times of heightened trader and investor uncertainty. It's also ironic that when a major agency downgrades U.S. debt, investors worldwide rush to buy it, as T-bonds and notes scored big price gains Monday. Also, many traders have little respect for the Standard & Poors and other major ratings agencies, after they failed miserably regarding correctly rating other assets and entities the past three years.

Meantime, the leaders in the European Union over the weekend scrambled  and made pronouncements to try to calm the market place regarding its own sovereign debt crisis. Emergency weekend meetings concluded with the European Central Bank pledging to buy more EU debt. However, the market place, overall, was unimpressed with the rhetoric coming from EU officials, even though Italian and Greek bond yields did decline on Monday. Many agree the more serious worldwide debt situation lies with the European Union and not the U.S. The S&P downgrade to the U.S. on Friday was more of a psychological blow than a fundamental reflection of the overall financial standing of the U.S.

The strong upside price action in gold Monday was less a reflection on the S&P downgrade of the U.S. debt Friday afternoon, but more a reflection of the overall postures of the world's currency markets and the world's economies. Those buying and holding gold see the recent political bickering in the U.S. and European Union, unstable currency markets and flagging world economies as pointing them directly to what they perceive as the ultimate world currency: gold.

Crude oil prices traded sharply lower again Monday and hit a fresh 10-month low of $82.52 a barrel, amid the world economic slowdown worries and risk aversion. Speculators are also being brutally wrung out of the crude oil market. Crude oil has seen serious near-term chart damage inflicted recently. Crude will still be a major "outside market" force for the precious metals, and especially silver.

In other news, JP Morgan on Monday forecast spot gold prices reaching $2,500.00 an ounce by year-end.

The London P.M. gold fixing was $1,693.00 versus the previous P.M. fixing of $1,658.75.

Technically, December gold futures prices closed nearer the session high Monday. Prices produced a very rare "gap higher" trade on the daily chart Monday. Gold bulls have the strong overall near-term and longer-term technical advantage and gained more power Monday. 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 technical resistance at $1,750.00. Bears' next near-term downside price objective is closing prices below solid technical support at $1,673.00, which is the bottom of Monday's upside price gap on the daily bar chart. First resistance is seen at $1,725.00 and then at $1,735.00. First support is seen at $1,710.00 and then at $1,700.00. Wyckoff's Market Rating: 10.0.

December silver futures prices closed near mid-range and saw a corrective bounce from solid losses scored late last week. Prices did close at a bearish weekly low close last Friday. Some near-term chart damage has been inflicted in silver recently. However, the silver bulls do still have the overall technical advantage as a four-week-old uptrend on the daily bar chart was negated late last week. Bulls' next upside price objective is producing a close above solid technical resistance at last week's high of $42.31 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $37.00. First resistance is seen at $40.00 and then at Monday's high of $40.405. Next support is seen at $39.00 and then at Monday's low of $38.41. Wyckoff's Market Rating: 6.0.

December N.Y. copper closed down 1,480 points 399.20 cents Monday. Prices closed near the session low and hit a fresh three-month low. Major near-term technical damage has been inflicted to suggest that a market top is in place. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 415.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of 389.00 cents. First resistance is seen at 400.00 cents and then at 405.00 cents. First support is seen at Monday's low of 398.05 cents and then at 395.00 cents. Wyckoff's Market Rating: 3.0.

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By Jim Wyckoff of Kitco News;

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