By Jim Wyckoff of Kitco News
Comex gold futures prices are trading modestly higher Monday morning. Prices are hovering near Friday's all-time high of $1,301.30, basis the most active December futures contract. A weaker U.S. dollar is still producing fresh buying interest in the gold market. December Comex gold last traded up $2.80 an ounce at $1,300.90. Spot gold was last quoted up $2.50 at $1,300.00.

The U.S. dollar index hit a fresh eight-month low Monday morning. The dollar index remains weak, technically. The inverse price relationship between the U.S. dollar index and gold appears to have strengthened recently. As long as the U.S. dollar index is in an overall price downtrend on the charts, look for gold prices to continue to trend sideways to higher.

Don't be surprised to see bouts of minor profit-taking pressure and market consolidation as gold prices trade near all-time highs. However, if recent history holds true, willing bargain-hunting buyers will step in to buy the dips in the gold market.

Reports overnight said a poll taken at the London Bullion Market Association conference showed participants believe gold prices will reach above $1,400.00 an ounce within a year's time.

U.S. economic data due out Monday includes the Federal Reserve's Chicago national activity index and the Chicago Fed midwest manufacturing index.

The London A.M. gold fixing was $1,298.25 versus the previous London P.M. fixing of $1,297.00.

Technically, December Comex gold futures bulls still have the strong overall near-term and longer-term technical advantage. There are still no early technical clues to hint that a market top is close at hand in gold. However, a decent profit-taking pullback soon would not be surprising. Still, the lack of high volatility at the higher price levels in gold also suggests prices can continue to trend generally higher in the near term. Prices are in a two-month-old uptrend on the daily bar chart.

Bulls' next near-term upside technical objective is to produce a close above psychological resistance at $1,325.00 in December gold. Bears' next near-term downside price objective is closing prices below solid technical support at $1,270.00. First resistance is seen at Friday's record high of $1,301.30 and then at $1,305.00. Support is seen at the overnight low of $1,296.20 and then at $1,287.50. Today's near-term Fibonacci support/resistance level: $1,290.00.

Comex silver futures are higher Monday and hit another fresh 30-month high overnight. A weaker U.S. dollar index and record high gold prices are boosting silver. December silver last traded up 17.6 cents at $21.575 an ounce.

Silver bulls have the solid near-term technical advantage at present. Prices are in a steep five-week-old uptrend on the daily bar chart. While there are still no early technical clues to suggest a market top is close at hand the market is due for a corrective, profit-taking pullback soon.

The next downside price objective for the bears is closing prices below solid technical support at last week's low of $20.515. Bulls' next upside price objective is producing a close above solid technical resistance at $22.50 an ounce. First resistance is seen at the overnight high of $21.645 and then at $21.75. Next support is seen at the overnight low of $21.405 and then at $21.12. Today's near-term Fibonacci support/resistance level: $21.21.

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

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