Compiled 01/26/11 6:00 AM (CT) Statistics: London Gold Fix $1335.50 +$9.50 LME Copper Stocks 394,700 tons +5,625 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) At the lows in the prior trading session, April gold was trading as much as $103 an ounce below the early January highs. However, prices overnight were seemingly lifted by a combination of short covering and bargain hunting buying. Not surprisingly, the gold market has seen evidence of aggressive liquidation of derivative gold holdings in the face of the January washout in prices. Some press outlets pegged the liquidation in one gold derivative holding to be the largest single day decline in that instrument. Therefore, it would appear that some portion of the weak handed long contingent has been forced to the sidelines. The most recent COT positioning report showed the combined Non Commercial/Non Reportable net long position to be 233,619 contracts, but since that reading, April gold prices have at times been down as much as $47 an ounce and that probably served to reduce the futures long positioning. The gold market did see evidence of rising physical gold production overnight from a Russian gold miner and while the market hasn't paid much attention to supply side news lately, the gold trade is probably in a more vulnerable mode to that type of news in the wake of the recent slide in prices. Some have suggested that the recent washout in gold was the result of declining Euro zone uncertainty, while others have suggested that the fear of rising US and Chinese interest rates was the primary culprit. Therefore gold prices are likely to see a noted reaction to the FOMC statement later today. It could also mean that gold will react to the new home sales release, as higher US rates might not be likely until the US housing market is on a stronger footing. Some analysts are suggesting that gold and other physical commodities are simply in the midst of a needed technical correction. Comex Gold Stocks were 11.561 million ounces down 3,150 ounces. Gold 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 stronger this morning. Early indications are for the US stock market to open higher this morning. The Dollar is weaker against most of the major currencies during overnight trading. The Japanese Ministry of Finance said that new issuance of Japanese government debt would be over 20% above their spending cap within three years. Germany had an auction of 30-year bunds today that received a bid-to-cover ratio of less than 1-to-1. The Irish central bank has said that any measure of prospective loan losses is likely to rise during new capital reviews of banks in that nation. German Import Prices during December were up 2.3%, higher than expectations. The Federal Reserve's Open Market Committee meeting will conclude their 2-day meeting today, and will have their post-meeting announcement around 1:15 PM. Major US economic numbers to be released this morning include December New Home Sales at 9:00 AM, and a private survey of mortgage applications released before the opening. The second leg of the Treasury's monthly refunding, the 5-year note auction, will have results announced at 12:00 PM.