Compiled 01/20/11 6:00 AM (CT) Statistics: London Gold Fix $1364.50 -$9.25 LME Copper Stocks 380,525 tons -1,225 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While the gold market might have been slightly undermined by news of a rise in 2nd quarter gold output from BHP overnight, gold recently hasn't been closely tied to the ebb and flow of physical supply. Some players think that a lack of fireworks from the China/US summit in Washington has caused some safe haven liquidation of gold, while others suggest that softening economic views toward the US economy and some weakness in physical commodity markets is causing gold to weaken. While the gold market could have seen some support from hot Chinese inflation readings overnight, the Chinese government overnight also suggested that inflation at the beginning of 2011 would be high, but that inflation would fall later in the year and that seemed to mute the impact of the Chinese headline inflation news. Some players are suggesting that gold is starting to sense slowing in the US economy and that could make the US claims, Existing home sales and the Philly Fed Business survey readings later this morning the main driving force behind gold price action. Indian and Asian gold prices were down slightly overnight and with the entire metals complex showing weakness in the early US Thursday morning action and grain prices looking to be mixed to lower, its not surprising to see gold prices this morning starting out on a weaker footing. Comex Gold Stocks were unchanged at 11.721 million ounces. Comex Gold Stocks have reached a new record high level. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were generally lower during overnight trading, stock indices in Europe are mixed 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, although posting a small gain versus the Yen. President Hu Jintao of China will meet with US legislators as part of the US/Chinese summit meeting. North Korea has proposed high-level military talks with South Korea in order to diffuse tensions between the two nations. The Chinese CPI during December was up 4.6% year-on-year, higher than forecasts. Chinese Retail Sales during December were up 19.1% year-on-year, higher than expectations. Chinese GDP during the fourth quarter was up 9.8% year-on-year, higher than forecasts. The German PPI during December was up 5.3% during December, higher than expectations. US economic numbers to be released this morning include Weekly Jobless Claims at 7:30 AM, the January Philadelphia Fed Business Outlook survey, a private survey of Leading Indicators, and a private survey of Existing Home Sales at 9:00 AM.
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