US Gold futures finished pit trade lower Monday on profit taking and chart consolidation.

Prices backed down a bit from last week's strong gains that saw prices Friday hit 6 month high at 1,745.40.

The Key outside markets were mildly Bearish for precious metals Monday, as the USD index was slightly higher and Crude Oil prices were slightly lower.

Dec Gold last traded - 8.40 at 1,732.10 oz.

Spot Gold was last quoted - 5.40 at 1,730.25 oz.

Dec Comex Silver last traded - 0.105 at 33.585 oz.

The market is focused on this week's meeting of the Federal Open Market Committee (FMOC) which starts on Wednesday and ends Thursday with Fed Chairman Bernanke holding a press conference.

Last Friday's weak US jobs report opened the door for more monetary stimulus from the US Fed. If that happens it will be Bullish for the stock and commodity markets.

The consensus is not clear on whether the Fed will act this week, or wait. But the market is expecting more monetary stimulus sooner rather than later.

In overnight news: European stock markets were stable and quiet ahead of the FOMC meeting and a German constitutional court ruling Wednesday on the validity of the European Stability Mechanism.

Dutch elections are also slated for Wednesday. Spanish and Italian bond yields inched up overnight, but were still near multi-month lows and well below 6%.

There was more downbeat economic news coming out of China overnight. China's trade surplus widened as imports declined. Industrial production in China also slowed in August. Asian stocks were narrowly mixed overnight.

The USD index was slightly higher Monday, but did hit a 4 month low overnight. The "Greenback Bears" still have the solid near-term technical advantage as a 7 wk-old downtrend line is in place on the daily chart.

Crude Oil prices were slightly lower Monday. Crude Oil Bulls have the overall near-term technical advantage.

WTI Crude Oil 96.33 -0.09 ( -0.09%)

The London PM Gold fixing is 1,732.00 vs. the prior PM fixing at 1,728.00.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.