Compiled 01/25/11 6:00 AM (CT) Statistics: London Gold Fix $1326.00 -$21.50 LME Copper Stocks 389,075 tons +7,575 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market appears to be facing a broad based physical commodity market liquidation wave this morning, with prices falling to the lowest level since October 27th. While the Dollar is showing some strength this morning, the currency market action doesn't appear to be the primary reason behind the noted pressure in gold prices this morning. The gold market might be seeing some pressure from a prediction of a 2011 top in gold, that is expected to be the result of rising US interest rates and that sentiment should make the FOMC statement release on Wednesday afternoon a fairly significant report for the gold trade. It is possible that the gold market was undermined by very robust interest in the European Financial Stability Facility initial 5 billion offering and it is also possible that gold is seeing some spillover selling pressure from weakness in a long list of physical commodities this morning. In short, the initial environment this morning seems to favor of the bear camp and it is not clear if the scheduled US numbers will bail out the gold bulls, or add to their woes this morning. If the gold market is concerned about higher US interest rates later this year, then positive US economic readings this morning, should apply additional pressure to gold prices. While gold hasn't paid that much attention to physical production news lately, it is also possible that news from Harmony Mines, that they will reach their quarterly gold output target is prompting some selling action this morning. Comex Gold Stocks were unchanged at 11.564 million ounces. Stocks have declined 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally weaker this morning. Early indications are for the US stock market to open with moderate losses this morning. The Dollar is stronger against most of the major currencies during overnight trading. The Bank of Japan kept Japanese benchmark interest rates unchanged, but raised their official forecast for Japanese core CPI over the next fiscal year. India's central bank raised their benchmark interest rate by 0.25%, their seventh hike since the start of last year. The European Financial Stability Facility issued their first bonds today, with indications of very strong demand. UK GDP during the fourth quarter was down 0.5%, much worse than expectations. Major US economic numbers to be released this morning include a private survey of Housing Prices at 8:00 AM, the Richmond Fed Manufacturing Index for January and a private survey of Consumer Confidence during January at 9:00 AM, and several private surveys of store sales released during the morning.
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