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Metals End Higher as Gold Sets Another New Record High-$1624 (07/25/2011)

(Kitco News) - Comex gold and silver futures prices closed the day session higher Monday, with August gold powering to another new all-time record high of $1,624.30 an ounce. The U.S. debt limit debacle and the simmering European Union debt crisis continue to produce safe-haven investment demand for the precious metals. The technical postures for both gold and silver are also fully bullish. August gold last traded up $11.30 at $1,612.80 an ounce. Spot gold last traded up $12.50 an ounce at $1,612.75. December Comex silver last traded up $0.30 at $40.445 an ounce.

The market place has started the trading week with no U.S. debt limit agreement reached by U.S. lawmakers. However, the tenor of the market place, at present, is that an agreement will be reached sooner rather than later.

However, it's a different matter with the European Union debt crisis, according to the general view of the market place. Traders are more uncertain about the EU situation spreading into a worldwide debt contagion. Moody's overnight downgraded Greece's sovereign debt rating yet another notch. While the U.S. debt limit situation could disappear from investors' sight within days, the EU debt crisis will likely continue to linger and even fester, as it has for the past nearly two years.

The U.S. dollar index traded slightly lower Monday, after a drubbing last week. The dollar index bears have regained downside technical momentum. The weaker technical posture of the dollar index is also an underlying bullish factor for gold and silver.

Crude oil prices traded lower Monday but are still hovering just below $100.00 a barrel. Crude oil bulls have recently gained some upside momentum. 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 $1,613.50 versus the previous P.M. fixing of $1,602.00.

Technically, August gold futures prices closed near mid-range. Prices did back down from the daily high on some mild profit-taking pressure. Gold bulls have the strong overall near-term technical advantage and gained fresh power Monday. 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 $1,620.00 and then at the record high of $1,624.30. First support is seen at Monday's low of $1,603.80 and then at $1,600.00. Wyckoff's Market Rating: 8.5.

December silver futures prices closed near mid-range Monday and hit a fresh 11-week high early on. A weaker U.S. dollar index was bullish for silver Monday, but gains were limited by lower crude oil prices. The silver bulls still have the overall technical advantage and gained some more upside momentum Monday. 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 Monday's high of $41.10 and then at $41.50. Next support is seen at Monday's low of $39.91 and then at $39.50. Wyckoff's Market Rating: 7.0.

December N.Y. copper closed down 40 points 442.55 cents Monday. Prices closed nearer the session high and saw mild profit-taking pressure. The key "outside markets" were neutral for copper Monday, as the U.S. dollar index was lower but crude oil prices were also weaker. The copper bulls still have the overall near-term technical advantage. 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 433.05 cents. First resistance is seen at Monday's high of 443.50 cents and then at 445.00 cents. First support is seen at 440.00 cents and then at last week's low of 438.75 cents. Wyckoff's Market Rating: 6.5.