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(Kitco News) - Comex gold futures prices are trading strongly higher again Tuesday morning and overnight hit another all-time record high of $1,782.50 an ounce, basis December futures. The gold market has gone parabolic, meaning that price gains have accelerated markedly just recently--and almost vertically on the daily charts. Gold is seeing very strong safe-haven investment demand after the U.S. got a debt downgrade last Friday and as the European Union attempts to contain its own escalating debt crisis. December gold last traded up $42.20 at $1,755.40 an ounce. Spot gold last traded up $35.10 an ounce at $1,752.75. December Comex silver last traded down $1.053 at $38.36 an ounce.
Chart price history shows that when a market does go parabolic, or into an acceleration phase, it's usually the final stage of a major bull market run. However, chart history also shows that the final, accelerating stage of a major bull market run can see around 25% to 40% of the entire price move during the bull run occur in that shorter, final stage of the bull market.
Respected gold market watcher Jeffrey Christian of CPM Group said Monday afternoon in an interview with CNBC that a market top in gold may be near.
At the least, the gold market is now due for a healthy downside price correction. However, would-be top pickers in the gold market do not want to stand in front of this presently still-steaming locomotive.
The European and Asian stock markets were under pressure overnight, but the U.S. stock indexes did rebound overnight in still-volatile trading. If the U.S. stock indexes can stabilize and begin to trade at least sideways in the near term, that would be a calming factor in the market place and would likely be a bit near-term bearish for gold. There's an old market adage that says "when there's blood in the Street," the stock market is close to a bottom. There was some blood in the Street during the panic selling seen late Monday afternoon.
The one-day meeting of the U.S. Federal Open Market Committee (FOMC) will see its results closely scrutinized by the market place Tuesday afternoon. It's likely the Fed will say something about the recent stock market meltdown.
The leaders in the European Union are still scrambling to try to calm the market place. So far, traders and investors have been unimpressed with the rhetoric coming from EU officials. Many agree the more serious worldwide debt situation lies with the European Union and not the U.S.
The U.S. dollar index is weaker early Tuesday and that's also a bullish factor for the precious metals. Recent price action in the dollar index does hint that the index has put in a market low.
Crude oil prices are trading steady to weaker Tuesday morning, but well off the overnight lows that hit a fresh 14-month low of $75.71 a barrel. Fears of a world economic slowdown have hammered crude oil. Crude oil has seen major near-term chart damage inflicted recently. Crude will continue to be a major "outside market" force for the precious metals, and especially silver.
U.S. economic data due for release Tuesday includes the NFIB index of small business optimism, the weekly Goldman Sachs chain store sales index, preliminary productivity and costs, the weekly Johnson Redbook report and the one-day FOMC meeting.
The London A.M. gold fixing was $1,770.00 versus the previous P.M. fixing of $1,693.00.
Technically, make no mistake: gold futures bulls still have the very strong overall near-term technical advantage even though the market is due for a corrective pullback soon. There are still no early technical warning signals to suggest a market top is close at hand and the path of least resistance for prices remains sideways to higher overall. Bulls' next near-term upside technical objective is to produce a close above psychological resistance at $1,800.00. Bears' next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at the record high of $1,782.50, at $1,800.00. First support is seen at the overnight low of $1,717.70 and then at $1,700.00,
December silver futures are under pressure Tuesday. Bulls still have the overall near-term and longer-term technical advantage but trading has turned choppy recently. Importantly, the silver bulls are not nearly in the powerfully bullish technical posture that gold now enjoys. Silver 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 $39.00 and then at the overnight high of $39.67. Next support is seen at the overnight low of $37.98 and then at last week's low of $37.625.
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