Price action late this week has produced significant near-term technical damage in gold as December Comex futures prices dropped to a fresh six-week low of $1,657.00 an ounce as of this writing. There are now early technical clues that a near-term market top is in place for gold, with "near-term" meaning looking at a daily price chart, or a timeframe measured in days to several weeks. Importantly, the longer-term technical posture of gold remains fully bullish on the longer-term weekly and monthly charts, as prices remain in a 10-year-old uptrend and no significant longer-term technical damage has occurred.

December gold futures bears have quickly gained downside near-term technical momentum. The gold market bulls were unable to defend what was strong technical support at the August spike low of $1,705.40. Pushing well below that key price level has produced significant near-term technical damage to also suggest a bearish double-top reversal pattern has formed on the daily bar chart. Gold prices are also now in a three-week-old downtrend on the daily bar chart.

The gold market bulls' next upside technical objective is to produce a close above what is now solid technical resistance at $1,705.40. Above that lies chart resistance at $1,723.20 and then at Friday's high of $1,757.90.

Gold bears' next near-term downside price objective is closing prices below solid technical support at $1,600.00. Chart support is seen at $1,650.00, $1,625.00 and then at $1,600.00.

Comex Silver futures have seen more serious near-term technical damage occur, as the December contract fell to a fresh seven-month low of $32.05, as of this writing. Silver prices have declined by around $8.00 an ounce in just two days. Very serious near-term technical damage has been inflicted.

December silver futures prices are in a steep five-week-old downtrend on the daily bar chart. Bulls' next upside price objective is producing a close above strong technical resistance at $35.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $30.00. First resistance is seen at $33.00 and then at $34.00. Next support is seen at $32.00 and then at $31.50.

SOURCE:KITCO NEWS