A slumping U.S. dollar, some dour economic news out of Europe and ideas of further Fed easing in the U.S. prompted keen investor safe-haven buying interest in the gold market Tuesday. This was combined with a very bullish technical posture in the gold market to send prices to fresh all-time record highs. December Comex gold last traded up $26.10 an ounce at $1,273.20. Spot gold was last quoted up $26.70 at $1,272.25.

Safe-haven buying interest in gold resurfaced in strong fashion Tuesday following a much weaker than expected ZEW manufacturing report coming out of Germany that surprised the European stock and financial markets and had the debt markets in Europe very unsettled.

The U.S. dollar index weakened sharply Tuesday, partly due to a Goldman Sachs report that said the Federal Reserve could soon announce a fresh asset-purchase program to boost the U.S. economy. Such a monetary stimulus was viewed as bearish for the U.S. dollar. The U.S. dollar index has seen near-term technical damage inflicted this week, which further supported the gold market bulls Tuesday. The greenback got little solace and markets paid little attention following a slightly stronger than expected U.S. retail sales report issued Tuesday morning.

Reports overnight said gold demand in major gold consumer India has increased due to seasonal celebrations in that country. However, the demand has not been as strong as expected due to higher gold prices.

The London P.M. gold fixing was $1,265.50 versus the previous P.M. fixing of $1,243.75 an ounce.

From an important technical perspective, December Comex gold futures bulls still have the strong overall near-term and longer-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Now, look for price volatility in the gold market to heat up in the near term, with bigger daily price movements likely, both on the upside and on the downside.

Bulls' next near-term upside technical objective is to produce a close above psychological resistance at $1,300.00. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,237.90. First resistance is seen at Tuesday's record high of $1,276.50 in December gold, and then at $1,280.00. Support is seen at the June high of $1,270.60 and then at $1,264.70.

An examination of the longer-term weekly and monthly continuation charts for nearby Comex gold futures prices also reveals longer-term uptrends are firmly in place on those charts. On the monthly gold chart, prices have been trending higher for nearly 10 years, since the early-2001 low of $255.00 an ounce. For the longer-term price uptrend on the monthly gold chart to be negated, based upon the last "reaction low" on the chart being penetrated on the downside, nearby gold futures prices would have to drop below that last
reaction low, which is presently $1,044.50. On the weekly gold chart, the last reaction low is $1,155.60. Any time a major price uptrend is negated on the longer-term charts, it's a strong clue that a major market top is in place.

Wyckoff's Market Rating for gold: 8.5.

December silver futures closed up 30.9 cents at $20.46 an ounce Tuesday. Prices closed nearer the session high and scored another fresh 26-month high. The weaker U.S. dollar Tuesday, along with new highs in gold, prompted fresh speculative buying interest in the silver market. Silver bulls still have the solid near-term technical advantage. There are still no early technical clues to suggest a market top is close at hand. The next downside price objective for the bears is closing prices below solid technical support at $19.68. Bulls' next upside price objective is producing a close above solid technical resistance at $21.00 an ounce. First resistance is seen at Tuesday's high of $20.55 and then at $20.75. Next support is seen at $20.27 and then at $20.00. Wyckoff's Market Rating: 8.5.

December N.Y. copper closed down 120 points at 346.70 cents Tuesday. Prices closed near mid-range and were pressured by some weak economic data coming out of Europe. The U.S. dollar index was sharply lower Tuesday, which did limit the downside in copper. The copper bulls still have the overall near-term technical advantage. Bulls' next upside objective is pushing and closing prices above solid technical resistance at 360.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 330.00 cents. First resistance is seen at 350.00 cents and then at last week's high of 353.45 cents. First support is seen at 345.00 cents and then at Tuesday's low of 342.80 cents. Wyckoff's Market Rating: 6.5.