Compiled 02/09/11 6:00 AM (CT) Statistics: London Gold Fix $1362.50 +$8.50 LME Copper Stocks 396,400 tons +4,375 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The bull camp has to be somewhat happy with the gold market action yesterday, as the market was able to discount the news of rising Chinese interest rates and in turn claw out a fresh new high for the move on the charts. It appeared as if gold was lifted yesterday in the wake of hawkish comments from the Fed's Lacker, who questioned the continuance of US bond purchases and who also suggested that the US economy was distinctly improving. In other words, at least one member of the US Fed is openly concerned about inflation and that angle of thinking is likely to be followed up on into public appearances from both Geithner and Bernanke later today. From the overnight action, the gold market didn't see anything fresh from the return of the Chinese trade, but the gold market did see some initial buying interest in the Indian gold trade. Some traders think that the prospect of surging wheat prices, off adverse weather in the US and China, could spark another wave of food price inflation psychology and therefore the gold trade could be looking over its shoulder at the action in the grain markets. In the end, the gold bulls will probably need Bernanke to stand by his recent statement that the US economy still needs assistance and that inflation is still under control, as any hint of higher US rates would probably not be a good thing in the wake of the Chinese interest rate hike earlier this week. Comex Gold Stocks were 11.449 million ounces up 6,000 ounces. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe are mixed during overnight trading, early indications are for the US stock market to open with moderate losses this morning. The Dollar is weaker against most of the major currencies during overnight trading, although posting a small gain versus the Yen. Military talks between North and South Korea have broken off, with no further meetings scheduled. A credit ratings agency warned Japan that unsuccessful fiscal reforms could have a negative impact on their credit rating. The German Trade Surplus during December was 14.0 billion Euros, higher than forecasts. The UK Trade Deficit during December was 9.25 billion Pounds, larger than expectations. US economic numbers this morning include a private survey of mortgage applications released before the opening. The second leg of the US monthly refunding, the 10-Year Note auction, will have results announced at 12:00 PM. In addition, Fed Chairman Bernanke will provide testimony for the House Budget Committee this morning.
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