Morning Gold Market Report 21th August

 
on August 21 2012 10:46 AM

Compiled 08/21/12 6:00 AM (CT) Statistics: London Gold Fix $1,624.00 +$8.75 LME Copper Stocks 234,500 tons +350 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With a fresh new high for the move overnight, December gold prices rose to the highest levels since August 10th. At least to start, the gold market is facing mostly positive outside market forces, as the Euro is stronger, equities are generally higher and finally grain and energy prices are also tracking higher in the early Tuesday US trade action. While the US economic slate is somewhat thin, attention early in the session could be locked onto a speech from the Atlanta Fed President Lockhart. However, given positive US data of late, there isn't a high expectation of supportive policy dialogue from the Fed. Gold could have been held back by a mostly steady Royal Bank of Australia stance overnight, but that news might have been mostly countervailed by news of an increase in UK borrowing for the month of July. One might see news of possible legal action against South African gold miners for health problems in workers as a positive, as that could temporarily idle production, or it could simply increase the future cost of mining gold, as changes to mining practices are forced into place. News of a decline in gold production for the month of June in Peru might be another factor favoring the bull camp in the early trade today. As in the Euro, gold is probably drafting a measure of support from ongoing hopes of limits on European bonds spreads ahead. While most of the recent gains seem to have come off an improvement in the Euro zone situation, some buyers of gold might need to see some hint of easing from the US Fed this morning and therefore traders might expect some reaction to the early Fed speech. Comex Gold Stocks were 10.844 million ounces down 202 ounces. Gold stocks have declined 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT)Chinese stocks were stronger overnight. Corporate earnings prompted some buying overnight and that allowed the Shanghai Composite to rise to some of the highest levels for the month of August. French and German shares were also higher overnight, as talk of European bond buying kept attitudes positive toward the EU debt situation. The US scheduled report slate is rather thin today, with only some private chain store sales readings due out early and that could leave a speech from the Fed's Lockhart early in the session as the most important development of the trading session.

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