Compiled 01/18/11 6:00 AM (CT) Statistics: London Gold Fix $1368.75 -$.50 LME Copper Stocks 377,925 tons -1,075 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With the Asian Treasury trade seemingly dredging up Euro zone debt concerns off the idea that the EU failed to come to a decision on expanding its debt safety net, it is clear that the Euro zone situation isn't going to go away anytime soon. However, the Dollar is starting the holiday shortened US trading week out softer and that is probably the result of a much stronger than expected German ZEW index reading and a somewhat favorable Spanish bill auction. However, the gold market could be held back slightly by classic fundamental supply side news, as the trade was presented with news of rising South African production, as well as news of higher output from Ghana and African Barrick gold. While the South African gold production from November jumped by over 2% from the prior November tally, the gold market hasn't been overly reactive to increases in physical gold supply. However, with Iamgold also posting an increase in production overnight, the market certainly saw an unusually large amount of potentially undermining gold production news. On the other side of the equation, Rio Tinto's 4th quarter mined and refined gold output declined and that might be a partially countervailing development to the apparent tide of rising supply. Not surprisingly, the gold market is still seeing predictions of a technical correction by several analysts, but there were also a couple of positive price predictions from two noted financial companies overnight. In the action today, gold is likely to take its direction from the currency markets, but US scheduled data is also capable of providing some influence on gold prices. Comex Gold Stocks were unchanged at 11.633 million ounces. Gold stocks have declined 12 of the last 20 days. The Commitments of Traders Futures and Options report as of January 11th for Gold showed Non-Commercial traders were net long 201,886 contracts, a decrease of 22,837 contracts. The Commercial traders were net short 252,192 contracts, a decrease of 27,500 contracts. The Non-reportable traders were net long 50,306 contracts, a decrease of 4,663 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 252,192 contracts. This represents a decrease of 27,500 contracts in the net long position held by these traders. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally stronger this morning. Early indications are for the US stock market to open near unchanged levels this morning. The Dollar is weaker against most of the major currencies during overnight trading. Euro zone Finance Ministers have postponed any decision over increasing the size of their rescue fund, but may have agreed to add a liquidity component to the next round of bank stress tests. In front of this week's Sino/US summit, Chinese President Hu Jintao has said that he does not accept US arguments that the Yuan is undervalued versus the Dollar. A private survey of German economic sentiment during January was at 15.4, higher than forecasts. The UK Consumer Price Index during December was up 1.0%, higher than expectations. US economic numbers to be released this morning include the NY Fed Empire State Manufacturing index for January at 7:30 AM, a private survey of the US housing market during January at 9:00 AM, and several private surveys of store sales released during the session.