Comex gold futures prices are solidly higher in early U.S. trading Thursday and hit a fresh nearly four-month overnight. The precious metals were already enjoying fresh upside technical momentum this week when they got a booster shot Wednesday afternoon from bullishly construed minutes of the last meeting of the Federal Reserve’s Federal Open Market Committee. December gold last traded up $21.60 at $1,662.20 an ounce. Spot gold was last quoted up $5.30 an ounce at $1,660.00.  September Comex silver last traded up $0.664 at $30.215 an ounce.

The market place continues to digest Wednesday afternoon’s somewhat surprising contents of the minutes of the last FOMC meeting. FOMC members said they are ready to implement further monetary stimulus measures should the U.S. economy show more weakness. The minutes were bullish for most commodity markets, including the precious metals, while putting downside pressure on the U.S. dollar index.

In overnight news, Asian stocks rallied on the renewed hopes for a U.S. monetary stimulus package. However, there was a weaker-than-expected manufacturing sector report coming out of China Thursday. The HSBC manufacturing purchasing managers’ index came in at the lowest reading in nine months. European stocks backed down from their daily highs when the European Union reported its own weak purchasing managers’ index Thursday, which suggests the EU is slipping back into economic recession.

In other news, reports said the price of spot gold in India hit a record high Thursday, basis the Indian rupee currency.

The U.S. dollar index is weaker in early trading Thursday and hit a fresh four-month low overnight, following the FOMC minutes. The greenback bears have gained the slight near-term technical advantage as a four-week-old downtrend line is in place on the daily bar chart. Meantime, crude oil prices are firmer Thursday morning and hit a fresh three-month high overnight. Oil bulls have upside near-term technical momentum. The precious metals markets will continue to look closely at how these two key “outside markets” trade on a daily basis.

The London A.M. gold fix is $1,662.50 versus the previous London P.M. fixing of $1,642.00.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the flash manufacturing PMI and new residential home sales.

Technically, December gold futures prices hit a fresh nearly four-month high overnight as bulls this week have gained good upside near-term technical momentum. The market has seen a bullish upside “breakout” from the choppy and sideways trading range that had been in place on the daily chart for nearly three months. The gold market bulls have the overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the May high of $1,678.60. Bears' next near-term downside price objective is closing prices below solid technical support at this week’s low of $1,611.80. First resistance is seen at the overnight high of $1,669.50 and then at $1,678.60. First support is seen at the overnight low of $1,654.50 and then at $1,646.40. 

September silver futures hit a fresh nearly four-month high overnight. This week’s price action in silver has produced a big and bullish upside breakout from a sideways and choppy trading range that had been in place on the daily bar chart. Silver bulls have the overall near-term technical advantage and have good upside momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $31.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $28.00. First resistance is seen at the overnight high of $30.545 and then at $31.00. Next support is seen at $30.00 and then at the overnight low of $29.76 and then at $29.50.

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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com