Compiled 02/10/11 6:00 AM (CT) Statistics: London Gold Fix $1358.75 -$3.75 LME Copper Stocks 396,950 tons +550 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While the gold market seemed to garner some support from Fed comments yesterday, the market might be partially undermined this morning by a weaker than expected UK manufacturing reading and weakness in a host of physical commodity prices overnight. With the BOE meeting this morning and recent market talk touting the need to raise UK rates to control inflation, the decision from the BOE could have ramifications for gold prices this morning. Gold prices could also be partially undermined by news that South African gold production in December rose by almost 3% above the 2009 December production tally. Another element that might be pressuring gold prices this morning, is evidence that some gold derivative instruments saw an outflow overnight. However, news that Indian gold derivative interest overall rose in January could be seen by some as a sign that a key gold importer has continued to show a strong investment pattern. It is also possible that renewed strength in the Dollar and weaker equity prices is applying some pressure to gold, which seems to need evidence of growth and inflation to extend the bounce off the late January lows. Therefore some gold bulls probably want to see a noted decline in US initial claims this morning and perhaps some renewed strength in US equities. Comex Gold Stocks were 11.401 million ounces down 48,596 ounces. 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 today. The Dollar is stronger against most of the major currencies during overnight trading. The Chinese Premier said that he was confident that prices in his nation could be kept stable. The Irish government has postponed a plan to provide 10 billion Euros worth of support for banks in that nation until after a parliamentary election later this month. Japanese Machinery Orders during December were up 1.7%, lower than expectations. UK Industrial Production during December was up 0.5%, in line with forecasts. Major US economic numbers released this morning include Weekly Jobless Claims at 7:30 AM, and December Wholesale Trade at 9:00 AM. The final leg of the US refunding, the 30-Year Bond auction, will have results announced at 12:00 PM. In addition, Fed regional President Lockhart will give a speech during the session.
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