(Kitco News) - Comex December gold futures prices ended the U.S. day session sharply lower and near the daily low. Early safe-haven buying gave way to heavy selling pressure that was due to strong gains in the U.S. dollar index, sharp losses in crude oil and other commodity markets, profit-taking pressure and weak-handed long liquidation. Even though this week is starting out as a "risk off" trader and investor mentality in the market place, safe-haven gold could not benefit from it Monday. December gold last traded down $35.00 an ounce at $1,779.70 an ounce. Spot gold last traded down $35.60 an ounce at $1,777.50. December Comex silver last traded down $1.561 at $39.265 an ounce.

The U.S. dollar index traded sharply higher Monday. The greenback saw buying support coming from the weakening Euro currency amid the EU debt crisis. The greenback bulls have the near-term technical advantage. The recently improved technical posture of the U.S. dollar index has been an underlying bearish factor for the precious metals. However, the inverse trading relationship between gold and the U.S. dollar index has become less pronounced that it had been in recent months. Recent months have seen gold and the dollar index trade in tandem on the upside when investor anxiety is at higher levels.

Crude oil futures prices were sharply lower Monday, and that helped to pressure gold, and more so silver. Crude oil has been and will remain an important "outside market" that will influence the precious metals markets.

The European Union sovereign debt situation remains in the financial news headlines. The weekend found no major agreements among EU and Greece officials, and there is now concern that Greece could default on a debt payment this week. Meantime, EU officials doling out the money to Greece are trying to hold Greece's feet closer to the fire, regarding commitments to austerity measures. This situation is messy and many believe it cannot be resolved without Greece being kicked out of the European monetary union. The EU debt situation remains a bullish underlying factor for gold, even though it's likely that the present bad situation regarding EU debt has likely been mostly factored into market prices.

The London P.M. gold fixing was $1,794.00 versus the previous P.M. fixing of $1,794.00.

Technically, December gold futures prices closed nearer the session low Monday. Trading has turned very choppy. This type of "backing and filling" action on the charts is not surprising. No chart damage occurred Monday, but the bulls do not want to see good follow-through selling pressure on Tuesday that would likely produce some near-term technical damage and raise the specter of a bearish double-top reversal pattern forming on the daily bar chart. At present, the gold market bulls still have the overall technical advantage. Bulls' next upside technical objective is to produce a close above solid technical resistance at last week's high of $1,865.20. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,765.40. First resistance is seen at $1,800.00 and then at 1,817.60. First support is seen at Monday's low of $1,771.00 and then at $1,765.40. Wyckoff's Market Rating: 7.0.

December silver futures prices closed near the session low Monday and hit a fresh four-week low. The silver bulls still have the slight overall near-term technical advantage, but did fade again Monday and do not want to see follow-through selling pressure on Tuesday that would produce some fresh chart damage. The key "outside markets" were bearish for silver Monday as the U.S. dollar index was sharply higher while crude oil prices were sharply lower. Bulls' next upside price objective is producing a close above strong technical resistance at last week's high of $41.60 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $38.81. First resistance is seen at $39.50 and then at $40.00. Next support is seen at $39.00 and then at $38.81. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed down 1,545 points 377.70 cents Monday. Prices closed near the session low and hit a fresh 9.5-month low. The key "outside markets" were bearish for copper Monday as the U.S. dollar index was sharply higher while crude oil and stock index futures prices were sharply lower. Copper bears now have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at November 2010 low of 355.00 cents. First resistance is seen at 380.00 cents and then at 382.50 cents. First support is seen at Monday's low of 376.55 cents and then at 375.00 cents. Wyckoff's Market Rating: 3.0.

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; jim@jimwyckoff.com

Editor’s Note:

Kitco News will provide readers with comprehensive print and video coverage of three-major precious metals market events in New York, Toronto and Montreal during the next two weeks.

First, Kitco News will supply live coverage on Wednesday, Sept. 14, of the CPM Platinum Group Metals Seminar in New York. That will be followed by the Toronto Resource Investment Conference September 15-16, and then the London Bullion Marketing Association meeting in Montreal September 18-20.  

The CPM Group's Platinum Metals Group Seminar Sept. 14 will showcase presentations from some of the leading analysts and investors in the PGM sector. Register to watch the CPM Platinum Group Metals Seminar Live (Free Registration): http://cpmevents.kitco.com/

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