Compiled 10/02/12 6:00 AM (CT)

Statistics: London Gold Fix $1,778.50 +$8.00 LME Copper Stocks 224,150 tons +650 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Despite the easing move from the Royal Bank of Australia overnight, gold prices in the early US action weren't giving off definitively positive vibes. Rising unemployment readings from Spain and ongoing talk about the US fiscal cliff have tempered macro economic views into some private US employment survey figures later this morning. However, expectations for the ADP report call for a fairly solid result and while positive news might be supportive for some physical commodity markets, the gold market recently has become very dependant on the prospect of more easing from the US Fed.

At least to start today, gold is benefiting from favorable currency market action and from higher US equities. Gold might also see some minor support from news of a minor up tick in a gold derivative holdings yesterday afternoon. However, traders should expect somewhat of a noted reaction to the private jobs report due out early in the session, as jobs news is thought to be the primary focus of the Fed.

Comex Gold Stocks were 11.013 million ounces up 3,968 ounces.

While the RBA easing move overnight should provide fresh support for gold prices, a large measure of the gains in December gold over the last 5 trading sessions has come from hope of either Chinese or US central bank easing and therefore the gold trade is likely to fixate on economic information. In addition to the ADP figures, the markets will also see September Auto sales results and that news could also contribute to the easing/no easing debate.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) The Nikkei forged another downside breakout overnight on the charts and that weakness might have been truncated by an interest rate cut by the Royal Bank of Australia. Chinese stock markets were closed due to holiday. European stocks opened weaker, but managed to claw back into positive ground, perhaps because of the RBA rate cut. It is also possible that Spanish and European stocks were lifted slightly because of increased expectations of an upcoming bailout request from Spain. However, European investors are still on edge after recent PMI readings confirmed an ongoing pattern of slowing in the Euro zone into the end of the year.

The US stock market has started out on a positive note, from carry over beginning of quarter allocations and perhaps because of the easing move from Australia and the hints from the RBA of even more easing if it is necessary. Today the US will see private chain store sales figures, a private jobs report and New York ISM numbers and that data should increase the attention on the state of the US jobs sector into the Friday monthly payroll release.

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