Compiled 10/10/12 6:00 AM (CT)

Statistics: London Gold Fix $1,763.00 -$7.75 LME Copper Stocks 219,425 tons -1,625 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The bull camp will tout the capacity to respect the prior session's low on the charts overnight, while the bear camp will suggest that prices haven't been able to move away from a downside breakout zone. News that South African wage disputes haven't been resolved yet, might provide some support to prices, but there doesn't appear to be any fresh events from that area to drive gold prices higher.

At least to start, the gold market is facing a mixed to negative currency market track and gold also saw a mixed to weaker equity market trade overnight. Therefore the direction of US stocks will remain important, as lower stock prices probably gives the bear camp in gold and other physical commodities a slight edge today.

Gold might also be partially off balance as a result of news of an increase in January through August Chinese gold production, which was in excess of 10% over the prior year's similar period. Also undermining gold overnight were reports that some Indian buyers were hesitant to pay up gold in the face of the recent minor bounce in prices. It is also possible that gold saw some slight pressure, as a result of downgrades in several gold mining companies overnight.

In the end, revived fears of global slowing seemed to be the main theme operating in the early going today and while the US report slate is somewhat thin today, the market might see some corporate earnings news influencing the gold trade in the near term.

Comex Gold Stocks were 11.205 million ounces up 186,941 ounces. Comex Gold Stocks are now at the highest levels since 04/04/2012.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks were mixed overnight, as Shanghai shares managed a slight rally, while the Hang Seng finished a touch lower. Apparently some shares in China were lifted as a result of talk of fresh government subsidies that could stimulate rural auto sales. European markets were weaker to start today in the wake of growing concerns of soft earnings in that area. US stocks were also a touch lower in the early going perhaps because Alcoa kicked off the earning cycle yesterday with a loss.

Residual weakness in the Euro this morning might be another element weighing on gold prices early today but that action could be accentuated in the event that US wholesale inventories decline and the US Fed Beige book release later today, highlights the weakness that prompted the Fed to take aggressive action in their last meeting. There will also be two Fed speeches today, but the earliest speech isn't scheduled to begin until late in the afternoon.
 

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