Compiled 01/27/11 6:00 AM (CT) Statistics: London Gold Fix $1337.50 +$2.00 LME Copper Stocks 397,275 tons +2,575 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) At least initially, the gold market didn't seem to have much of a reaction to the S&P downgrade of the Japanese debt rating. While some gold players might see all the attention to inflation at the World Economic forum as a positive, some traders think that could shake out as a negative in the form of more aggressive regulation. In retrospect, the FOMC statement seemed to provide a lift to gold yesterday afternoon, as the Fed indicated that QE2 was going to continue, but that inflation was being given life by rising physical commodity prices. Reports from Asia overnight suggested that physical buying was slow and that could be something that highlights the ongoing vulnerability of gold and other physical commodities. On the other hand, the Dollar continues to make fresh new lows for the move in the wake of the news that US QE2 will continue and that might be lending gold and other metals markets some support. In fact, comments from the World Economic forum overnight have generally pointed to the argument that the US doesn't appear to be poised to reduce its debt load, as the State of the Union address merely called for a spending freeze at an extremely high level of spending. With an extremely active slate of US economic news this morning, the gold trade will get a good look at the US economy again and given the recent fear of rising interest rates earlier in the week, it is possible that good numbers could weigh on gold prices today. However, given the proximity to the FOMC statement release yesterday, it is possible that the fear of rising interest rates won't be given as much credence today as was seen early in the week. Comex Gold Stocks were unchanged at 11.561 million ounces. Gold stocks have declined 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe are generally mixed during overnight trading, early indications are for the US stock market to open near unchanged levels this morning. The Dollar is slightly weaker against most of the major currencies during overnight trading, although posting a small gain versus the Yen. A major credit ratings agency has cut the sovereign debt rating of Japan one level, due to expectations for larger issuance of government debt. Protests in Egypt against the Mubarak government have continued for a third day, with a large demonstration scheduled for tomorrow. The Japanese Trade surplus during December was 728 billion Yen, with double-digit gains on both the export and import side on a year-on-year basis. A survey of Euro zone Economic Sentiment during January was 106.5, slightly below expectations. Major US economic numbers to be released this morning include Weekly Jobless Claims and December Durable Goods at 7:30 AM, and a private survey of Existing Home Sales and the KC Fed manufacturing survey at 9:00 AM. The final leg of the Treasury's monthly refunding, the 7-year note auction, will have results announced at 12:00 PM.