Compiled 10/26/12 6:00 AM (CT)

Statistics: London Gold Fix $1,704.00 -$11.00 LME Copper Stocks 219,800 tons +1,100 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Fear of global slowing put global equity markets under pressure overnight and that has applied some initial pressure to gold and other physical commodity markets. In addition to disappointing corporate earnings from some key US consumer bellwethers (Amazon and Apple) the markets have also seen pressure from resource and auto maker shares. While some players expect the US GDP to be slightly higher, the overall level of US growth is likely to disappoint. Therefore, overnight news of lost gold production at AngloGold, of roughly 32,000 ounces per week due to labor problems and news of lower gold production from African Barrick in their 3rd quarter report, was generally lost on the gold trade overnight. The gold market also appears to be capable of discounting news that Vietnam might allow domestic banks to purchase up to 20 tons of gold before new liquidity rules are put in place. Expectations for the US GDP report call for a +.2% to +.3% gain over the prior quarter, but the +1.5% growth level might be the bull/bear line for gold and other physical commodity markets today. In other words, the failure to see growth come in above +1.5% could accentuate the initial risk-off vibe. While gold saw some adverse currency market action in the early Friday US trade, the main focus of the gold trade today is likely to be on big picture economic views and not on currency market action. Unfortunately, the markets have already been undermined by key consumer cyclical earnings news and that might increase the importance of the US GDP readings later this morning. Comex Gold Stocks were 11.243 million ounces down 225 ounces.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian stocks were weaker across the board with financials and auto maker shares leading the markets lower. South Korean shares fell down to a 7 week low and Australian equities were down because of weakness in resource and commodity related shares. European stocks were also lower in the wake of disappointing earnings from Ericsson and also because of weakness in French Banking shares. Early action in the US pointed to a weaker opening, with some players fearful of a soft GDP reading later this morning and others simply discouraged by overnight earnings results from Amazon and Apple.

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