(Kitco News) – Comex December gold futures prices are trading modestly higher in early U.S. trading Monday. Safe-haven buying interest is featured to start the new trading week, amid the ongoing and festering European Union debt crisis. This week is starting out as a “risk off” trader and investor mentality in the world market place, as evidenced by weaker world stock markets. That’s bullish for the safe-haven gold market. December gold last traded up $2.70 an ounce at $1,817.40 an ounce. Spot gold last traded up $3.10 an ounce at $1,816.00. December Comex silver last traded down $0.301 at $40.53 an ounce.

The European Union sovereign debt situation remains in the financial news headlines Monday. The weekend found no major agreements among EU and Greece officials, and there is now concern that Greece could default on a debt payment this week. Meantime, EU officials doling out the money to Greece are trying to hold Greece’s feet closer to the fire, regarding commitments to austerity measures. This situation is messy and many believe it cannot be resolved without Greece being kicked out of the European monetary union. The EU debt situation remains a bullish underlying factor for gold, even though it’s likely that the present bad situation regarding EU debt has likely been mostly factored into market prices.

The U.S. dollar index is trading higher Monday. The greenback is seeing buying support coming from the weakening Euro currency amid the EU debt crisis. The greenback bulls have the near-term technical advantage. The recently improved technical posture of the U.S. dollar index has been an underlying bearish factor for the precious metals. However, the inverse trading relationship between gold and the U.S. dollar index has become less pronounced that it had been in recent months. Recent months have seen gold and the dollar index trade in tandem on the upside when investor anxiety is at higher levels.

Crude oil futures prices are trading weaker early Monday, and that is somewhat limiting the upside in gold and more so in silver. Crude oil bulls still have a bit of upside momentum. Crude oil will remain an important “outside market” that will influence the precious metals markets.

U.S. economic data due for release Monday is light and includes the NAHB housing market index.

The London A.M. gold fixing was $1,817.00 versus the previous P.M. fixing of $1,794.00.

Technically, December gold futures have seen no serious chart damage inflicted with recent losses. At present, the gold market bulls still have the overall technical advantage. Longer-term and shorter-term price trends remain up on the charts. Bulls’ next upside technical objective is to produce a close above solid technical resistance at last week’s high of $1,865.20. Bears’ next near-term downside price objective is closing prices below solid technical support at last week’s low of $1,765.40. First resistance is seen at the overnight high of $1,832.90 and then at 1,850.00. First support is seen at $1,810.00 and then at $1,800.00.

December silver futures bulls still have the overall near-term technical advantage, but have faded recently. Bulls’ next upside price objective is producing a close above strong technical resistance at last week’s high of $41.60 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $39.40. First resistance is seen at $40.50 and then at the overnight high of $40.90. Next support is seen at the overnight low of $40.20 and then at $40.00.

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By Jim Wyckoff contributing to Kitco News; jim@jimwyckoff.com

Source: http://www.forbes.com/sites/kitconews/2011/09/19/comex-gold-firmer-on-fresh-safe-haven-demand/