Statistics: London Gold Fix $1,723.25 +$13.25 LME Copper Stocks 239,600 tons -175 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Gold seems to have started out on a positive track overnight and perhaps that action was largely the result of favorable Chinese equity market action and also from initial gains in European stocks. However, one can't conclude a risk-on vibe has settled into position today, as US equities are a little softer and physical commodities are facing adverse currency market action. In order to foster a full risk-on tilt, probably requires a more positive economic vibe and that in turn might require something positive from one or more of the scheduled US data points. In fact, to foster a full risk-on mentality today might even require a recovery in US equities. Clearly gold was somewhat lifted by a favorable Chinese PMI result but gold might have been partially limited by news of lackluster demand from Indian gold importers. News of increased gold production overnight was probably discounted somewhat as traders are currently focused on big picture macro economic prospects and the ebb and flow of demand. Therefore the gold trade is likely to see some increased volatility in the face of a flurry of US data which will be released later this morning. Without a positive shake from US data, the early gains in gold might be tested, especially if the data prompts more money to flow toward the Greenback. Comex Gold Stocks were unchanged at 11.243 million ounces.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Chinese shares were higher in the wake of talk that property curbs might be restrained but sentiment was also improved in the wake of an up tick in Chinese PMI data. European equity markets were also showing some initial gains in the wake of some favorable earnings news, but residual evidence of slowing in Europe kept upside traction limited. US equities have started out on a weaker footing, off concerns that the storm is going to cut into feeble US growth rates. The focus of the markets will probably shift back to US employment figures, as a couple private jobs reports are due out this morning from ADP and Challenger. The US economic report slate is also very active today and therefore the condition of the US economy is likely to impact a number of physical commodity markets today.

View All Market Commentary

*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

Copyright CME Group All rights reserved.