Statistics: London Gold Fix $1,791.00 +$4.50 LME Copper Stocks 222,675 tons -725 tons
GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With Hong Kong shares higher again overnight, European stocks showing positive early action and US stocks showing minimal positive action, it is somewhat surprisingly to see gold and the rest of the metals complex start out on a slightly weaker footing. Gold might have been a little disappointed in the lack of aggressive action from the BOJ meeting overnight. Apparently the gold market was unmoved by evidence of a rise in gold derivative holdings yesterday afternoon and perhaps weakness in grains and energies early this morning have tamped down some of the risk-on vibe.
With a week straight of gains perhaps gold has become a touch overbought technically, with the market's overnight high sitting roughly $33 an ounce above this week's lows. Residual conflict between platinum miners and mining companies is probably providing some measure of underlying support, but the main focus of the gold trade today is likely to be on the US payroll figures. It does seem as if some players were squaring positions directly ahead of the report and that could temper the downside action in gold in the event that the numbers are a little weak.
The line in the sand for gold into the payroll report is probably +105,000 as anything below that might disappoint stocks and revive the dollar. However, in the event that the payroll readings are patently disappointing, it probably won't take long for gold to resurrect talk of additional Fed easing.
Comex Gold Stocks were 11.013 million ounces down 129 ounces.
OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Hong Kong shares managed to extend to yet another gain on the day to finish the week out on a very positive track. Apparently Chinese auto sales were positive with BMW posting a 55% gain in auto sales for September. European stocks were up slightly in anticipation of something positive from the US Non Farm payroll report later in the trading session.
There has been some buzz that the non farm payroll report in the US will see some upward revisions to prior months data today and seeing the current month come in above +120,000 would probably be enough to leave a risk-on vibe in place today. The markets in general didn't seem to get much of an additional lift from the BOJ meeting, perhaps because there has been a flurry of central bank meetings this week, or the trade is somewhat on hold ahead of the US data.
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